"Our cost of funds dropped to 3.1 percent from 3.2 percent," Baiquni said.
Jakarta (ANTARA News) - State lender PT. Bank Negara Indonesia Persero Tbk (BNI) reported a strong growth of 79.9 percent year-on-year in profit to Rp4.37 trillion in the second quarter of 2016 despite a decline in credit quality.

President Director of the countrys fourth largest bank in assets Achmad Baiquni attributed the rise in profit to high growth in credits and fee based income, and efficiency in cost of fund.

"Our cost of funds dropped to 3.1 percent from 3.2 percent," Baiquni said here on Friday.

BNI outstanding credit grew in two digit by 23.7 percent year on year (yoy) to Rp288.7 trillion.

However, the non performing loan (NPL) of the bank also rose from 2.7 percent to 3 percent gross by the end of the first half of this year.

He acknowledged the quality of credit assets became a problem shadowing the performance of the bank in the first six months of the year.

Therefore, BNI has to increase its reserve funds from 138.8 percent in the second quarter 2015 to 142.8 percent in the same period in 2016.

The increase in the credit of the publicly listed bank resulted in a rose in its net interest income to Rp13.91 trillion or an increase of 11.7 percent yoy.

Its non interest income including fee based income grew 28.7 percent to Rp4.43 trillion.

Baiquni said business credit disbursements sustained credit portfolio as high as 73 percent with annual growth of 25.6 percent to Rp260.7 trillion.

Corporate credits accounted for 25.1 percent of its business credits.

The bank also recorded a soaring growth of 331 percent or Rp7.3 trillion in low interest Peoples Business Credit (KUR) pushing up KUR contribution to outstanding credit to 19.9 percent from 5.6 percent earlier.

Baiquni attributed the high growth to facility of guarantee and subsidy on interest offered by the government.

"Speaking about target, we prefer the government to set target for us," he said.

The bank holds Rp391.4 trillion in third party funds or an increase of 19.6 percent yoy, dominated by cheap funds (current account saving account (CASA) making up 60.4 percent and deposits making up the rest, he said.

With the outstanding credits and third party funds, BNI has assets valued at Rp539.1 trillion by the end of he second quarter of 2016.(*)

Editor: Heru Purwanto
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