JAKARTA: The glory of Indonesias banking industry continued into 2010 as the sector successfully packed IDR53.98 trillion profit as per November, soaring by 30% compared to the same period last year.In term of growth, the profit hike was not as solid as the 2009s, yet the value was the highest in the history. The 2010 profit in fact more than doubled compared to five years ago.Possibly, the banking profit may increase even more in December, a period with the highest disbursement level. In average, banks recorded nearly IDR5 trillion profit per month in 2010.Referring to the data of Bank Indonesia, the banking profit in 2010 was mainly backed by IDR228.8 trillion net interest income or 7% higher compared IDR213.68 trillion in 2009. At the same time, the interest expense in fact was curbed from IDR96.32 trillion to IDR92.2 trillion.Besides giving a dominant contribution, the revenue from loan interest posted a significant rise to IDR185.66 trillion or 16.18% compared to 2009. The accomplishment is impressive as the interest expense particularly on third party fund was dimmed to IDR85.87 trillion from IDR89.71 trillion.The lower interest expense while the public fund in fact increases reflects banks ability to establish cost efficiency. However, at the same time, banks capacity in boosting its revenue from credit also rises.Based on BI data, the robust credit interest income occurred merely due to an outstanding rise in financing by IDR308 trillion or 22.09% to IDR1,706.4 trillion.State lendersFour state-owned lenders become the main contributors to the solid net income of banking industry, amounting IDR20.9 trillion or 38.71% to the total profit of the industry. Those four state lenders are PT Bank Mandiri Tbk, PT Bank Rakyat Indonesia Tbk, PT Bank Negara Indonesia Tbk and PT Bank Tabungan Negara Tbk.Previously, Indonesias Minister of State-Owned Enterprises (SOEs) Mustafa Abubakar said that the biggest contributors to the net income of state lenders are Bank Mandiri and BRI.We estimate BRI and Mandiri to bag IDR17 trillion of total net income, while the remaining amount is contributed by BTN and BNI. Yet, we are still waiting for the audit results, he said.According to Mustafa, Mandiri and BRI may collect IDR8 trillion net income each. Such robust net income was mainly propelled by the rising credit disbursement.Meanwhile, private foreign exchange banks posted IDR19.65 trillion net income or soared by 43% compared to the previous year. Such growth significantly surpassed the state lenders growth at 42%.In the first eleven months of 2010, the local development banks bagged IDR7.48 trillion net income or rose by 19.87% compared to the previous period. Foreign banks net income totaled IDR3.47 trillion or slumped by 22% compared to IDR4.42 trillion in the previous year.Mirza Adityaswara, an economist at Indonesian Economist Association, revealed two factors triggering last years solid net income in the banking industry. First, it is the favorable credit growth, thus improving the net interest margin.Secondly, the better ratio of nonperforming loans, resulting into a decline in allowance reserve assets, he told Bisnis yesterday.He further added that whether or not such outstanding accomplishment will continue into this year, it will highly depend on two conditions, namely the certainty over the interest rate hike and the jump in crude oil price.Business Director of PT Bank Nusantara Parahyangan Tbk Budi Tjahja Halim said that the net income jump was backed by the business development during 2010. The bank experienced same condition.Credit disbursement and the accumulation of the third party fund recorded a favorable growth in 2010, he said yesterday.Budi added that the credit disbursement of the bank grew by 43% compared to 2009 while the distribution of third party fund soared by 42% compared to 2009.Last year, the Bandung-based lender aggressively carried out a credit expansion to retailers in Tasikmalaya's traditional market merely to foster its market penetration. Meanwhile, the credit disbursement to the supply chain of Japanese companies is centralized in Bekasi. (T02/NOM)
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