The plan to cut the lending rate, if realized, would not reduce the bank`s profit from interest because the overhead cost of every bank had declined since the BI rate was cut by 75 basis points in October, he said.Jakarta (ANTARA News) - State-owned Bank Negara Indonesia (BNI) is planning to cut its lending rate by 50 basis points or 0.5 percent later this month.
"After BI Rate has been lowered we will consider cutting our lending rate for December as soon as possible. We will reduce it by about 50 basis points or by the same figure as other banks," BNI Director Adi Setianto said here on Tuesday.
The plan to cut the lending rate, if realized, would not reduce the bank`s profit from interest because the overhead cost of every bank had declined since the BI rate was cut by 75 basis points in October, he said.
"Our profit will not come under pressure because the cost of funds has declined so the margin will not fall. Moreover, interest on third party fund placements in BNI is relatively low," he said.
The decline in the lending rate would mostly affect credits to the retail sector because interest on BNI`s credits to the corporate sector had been lower than the average basic interest rate for credits (SBDK), he said.
He said BNI`s SBDK as per September 30, 2011 for corporate credits stood at 10.75 percent, retail credits 13 percent, housing loans 11.80 percent and non-housing consumer credits 13.15 percent.
Bank Indonesia (the central bank) cut its key interest rate known as BI Rate by 50 basis points to 6 percent in November.
A number of state banks such as Bank Mandiri, BTN and BRI had lowered their lending rates by about 50 basis points earlier.(*)
Editor: Heru Purwanto
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