JAKARTA: State-controlled PT Bank Negara Indonesia Tbk's net profit in the first half rose 41% after it had lower loan provisions.Net income rose to IDR2.73 trillion in the January-June period, from IDR1.93 trillion in the year earlier period. Net interest income rose 5% to IDR6.09 trillion, while non-interest income rose 6% to IDR3.69 trillion.Its loan provision fell 25% to IDR1.61 trillion, from IDR2.13 trillion, contributing about a half of the profit increase.BNI President Director Gatot M. Suwondo confirmed that a considerable amount of decrease in loan provision was in line with the improving credit asset within the last few months.In the past three years we have improved the financial fundamentals, loan quality and reserve, he said at an analyst meeting & press conference yesterday.The provisioning cost was reduced, as loan quality was far better, he said. However, that condition would not continue since the management would foster income from better asset quality.BNI Finance Director Yap Tjay Soen said that net interest margin of BNI increased to 5.9%, since high cost funds in foreign exchange declined, mainly those coming from branch offices abroad, including one in New York, US.We manage from quarter to quarter. Earlier, we got excessive dollar, which we put in New York, but we didnt get anything. When we had excessive dollar, we reduce dollar-denominated liabilities. People put their savings in BNI, if we dont need it then we reduce [interest] and the funds will automatically flow out.The increase in profits became a positive sentiment, which boosted BNI shares on Indonesia Stock Exchange by 1.26% to IDR4.025, the highest in 12 weeks. Consequently, market capitalization of the bank reached IDR75.06 trillion yesterday.Bank DanamonIn another development, shares of PT Bank Danamon Indonesia Tbk plunged 3.51% to IDR5.500 on Indonesia Stock Exchange yesterday, as the bank announced a rights issue plan.It was the largest drop in the last 10 days, and the second largest this month.On July 15, the BDMN-coded stock sank 4.31% to IDR5,550 after the bank first published its rights issue plan.The drop of Danamon stock was an adjustment of price offered in the rights issue within the range of IDR4,100 and IDR4,800, said Edwin Sebayang, head research at PT MNC Securities.Traders are making adjustment because the current stock price is higher than the offered price in the impending rights issue, he told Bisnis yesterday.The adjustment, as he added, will continue to give pressures on the price, sending it down to the IDR4,800 level.The decline was not associated with Danamon's fundamentals since the bank has quite a good performance at the moment. He predicted that Danamon stock will reach IDR6,800 in 12 months after the rights issue.Bank Danamon plans to offer 1.21 billion new shares in the rights issue next month, aiming to raise at most IDR5 trillion. (t04/msw)

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