OCBC, Panin post double-digit profit growth

JAKARTA. Publicly listed private lenders OCBC NISP and Panin Bank saw their net profits grow above 10 percent last year as they managed to get more revenue despite slow loan growth.

OCBC NISP’s net profit grew 17 percent last year to Rp 1.3 trillion (US$102.5 million) from Rp 1.1 trillion in 2013, president director Parwati Surjaudaja said. Loan growth reached 7 percent to Rp 68.4 trillion in outstanding, versus Rp 64 trillion in 2013.

The profit growth was mainly driven by a 19 percent increase in net interest income to Rp 3.74 trillion last year from Rp 3.13 trillion in 2013, the bank’s financial report showed.

Parwati said a number of economic challenges at the domestic and global levels, including elections last year, had affected OCBC NISP’s performance in lending. Several property and expansion projects were put on hold last year to await a smooth transfer of power.

“Interest rate hikes due to rising inflation and rupiah depreciation have prompted slower [loan] growth,” she said. The central bank raised its benchmark Bank Indonesia (BI) rate aggressively in 2013, and banks began to feel the pinch last year. A higher reference rate makes lending more expensive and, instead, encourages funds to be stored deposits.

At least 42 percent of the bank’s loan went to its customers’ working capital, followed by 41 percent in investment and 17 percent in consumer loans, Parwati added.

“We have managed to grow our credit in a healthy way, so that we posted a net non-performing loan at 0.8 percent last year, far below the banking industry as well as among our peers in BUKU III,” Parwati said in a statement on Monday.

BUKU III banks are lenders with core capital of between Rp 5 trillion and Rp 30 trillion. As of last year, OCBC NISP posted at least Rp 12 trillion in core capital, while its capital adequacy ratio (CAR) stood at 18.7 percent.

Amid rising competition in the banking industry for customers’ funds, Parwati said the lender managed to book Rp 72.8 trillion in third-party funds (DPK) last year, increased by 6 percent from Rp 68.93 trillion in 2013. DPK consists of savings, demand deposits and time deposits.

Meanwhile, Panin Bank posted a 12 percent increase in net profit to Rp 2.15 trillion between January and December last year, from Rp 1.91 trillion in the same period of 2013.

The net profit growth was mainly driven by a 17 percent year-on-year increase in operating revenue to Rp 2.02 trillion last year.

“We have also managed to post a 16.9 percent increase in fee-based income to Rp 2.01 trillion last year, from Rp 1.72 trillion in 2013,” Panin Bank corporate secretary Jasman Ginting said.

However, its net interest income only increased by 1.8 percent to Rp 6.17 trillion last year, from Rp 6.06 trillion in 2013.

Loan growth, on the other hand, rose modestly by 8.74 percent to Rp 120.4 trillion in outstanding last year, versus Rp 110.7 trillion in 2013. The highest growth of 14.6 percent occurred in commercial lending, followed by a 3.3 percent gain in retail loans.

Panin Bank posted 0.46 percent in net non-performing loans last year, versus 0.75 percent in 2013, Jasman added.

Panin Bank had Rp 126.1 trillion in DPK as of December last year, up 4.9 percent from the previous year.

The lender is also categorized as a BUKU III bank, with its core capital at Rp 16 trillion last year, and 15.62 percent CAR. (Grace D. Amianti)