Eximbank sees profits jump 40 percent

JAKARTA. The Indonesia Export Financing Agency (LPEI), also known as Indonesia Eximbank, recorded a 40 percent year-on-year increase in profits to Rp 821.6 billion (US$70.9 million) in 2013 as it gained windfall profits from currency depreciation last year.

Indonesia Eximbank executive director I Made Gde Erata told a press conference on Wednesday that the jump in the company’s profits, which grew from Rp 586.5 billion recorded the previous year, was mostly supported by a significant increase in interest revenues, which were boosted by the rupiah’s weakening against the US dollar.

“Most of our financing was in US dollars; therefore, financing interests we received were also in the US currency,” Erata explained.

The agency recorded a 33 percent year-on-year increase in its revenue, from Rp 2.11 trillion in 2012 to Rp 2.82 trillion in 2013.

Its interest revenues went up nearly 33 percent to Rp 2.54 trillion last year, compared Rp 1.91 trillion it generated in the previous year. Interest revenues make up 90 percent of Eximbank’s revenues, while sharia revenues make up the remainder. Its gain in foreign exchange went up fivefold to
Rp 103.36 billion last year compared to the previous year.

Erata added that Indonesia Eximbank’s outstanding financing in 2013 had reached Rp 40.49 trillion, with financing in foreign currency accounting for 56.68 percent while the remainder was in rupiah. The agency’s outstanding financing rose by nearly 50 percent compared to Rp 27.05 trillion in 2012.

The LPEI’s financing for non-small and medium enterprises (SMEs) accounted for 91.04 percent while the remainder went to SMEs.

Out of total financing in 2013, 41.64 percent went to industry, followed by mining with 11.21 percent and agriculture with 10.81 percent.

Erata further explained that Indonesia Eximbank’s profit growth was also supported by a decline in the non-performing loan ratio (NPL). The bank’s gross NPL in 2013 stood at 3.26 percent, down from 4.38 percent in the previous year.

Another factor was a decline in the average cost-to-income ratio (BOPO), which stood at 67.59 percent in 2013, down from 68.76 percent in the previous year, Erata added.

“Our total assets in 2013 grew by 39.42 percent to Rp 46.47 trillion from the 2012’s assets which amounted to Rp 33.33 trillion,” he said.

Despite the central bank’s prediction that rupiah will perform better this year, Erata said that the agency was upbeat to have its assets growing by 20 percent, above the government’s target for the agency of 18 percent.

“We are optimistic that we can achieve the target, giving recent rises in commodity prices that will benefit exports,” he said.

The agency has set a modest target to see its financing going up by 10 percent, anticipating the country’s economic slowdown.

LPEI managing director Dwi Wahyudi said that the company would channel Rp 24 trillion of financing in three years, the funds of which will be obtained from issuing bonds.

The agency will issue Rp 8 trillion of bonds this year, half of which will be offered in the first half. Out of the total Rp 4 trillion to be offered in the first half, Rp 3 trillion will be corporate bonds while the remainder will be retail bonds.

“As we cannot obtain third party fund, we have to source our funding from other ways, including from issuing bonds,” Dwi explained. (Anggi M Lubis)