Indonesia’s Big Banks Post Strong First-Half Earnings

Dion Bisara & Francezka Nangoy

Bank Mandiri, the country’s largest lender by assets, Bank Negara Indonesia and Bank Central Asia reported higher earnings in the first half of the year thanks to robust loan demand by consumers and corporations.

Mandiri said its January-June net income rose 13 percent to Rp 7.1 trillion ($753 million) from Rp 6.3 trillion in the same period a year earlier. Its net interest income — interest earned on loans after deducting interest paid for deposits — increased 11 percent to Rp 12.7 trillion from Rp 10.4 trillion.

Mandiri’s president director, Zulkifli Zaini, said solid lending helped the bank post positive results. Total outstanding loans climbed 27 percent to Rp 350.4 trillion at the end of June from Rp 276.7 trillion a year earlier. “Bank Mandiri’s loan growth has been higher than the [rest of the] industry, especially on loans for SMEs [small and medium enterprises],” Zulkifli said on Monday.

According to data from Bank Indonesia, lending by the country’s 122 commercial banks grew by 26 percent in first half. The central bank kept its benchmark reference rate near a record low of 5.75 percent for the fifth straight month in July to help spur economic growth, which it has forecast at 6.1 percent to 6.5 percent for the year.

It has also predicted that total lending by the country’s commercial banks will grow by 27 percent this year.

“Some banks beat analysts’ consensus as lending continues to be strong,” Joseph Pangaribuan, an analyst with Samuel Sekuritas in Jakarta, said on Monday.

Bank Central Asia, which is partly controlled by Djarum Group, said net income rose 11 percent to Rp 5.3 trillion in the first half of the year from Rp 4.8 trillion in the same period a year earlier.

BCA’s net interest income surged 14 percent to Rp 9.2 trillion from Rp 8 trillion. Outstanding loans at BCA rose 42 percent to Rp 225.9 trillion from Rp 159.7 trillion.

“This growth is driven by our mortgage lending,” BCA’s president director, Jahja Setiaatmadja, said in a statement.

State-controlled Bank Negara Indonesia, the country’s fourth-largest bank by assets, reported a 20 percent increase in net income to Rp 3.3 trillion in the first half of the year from Rp 2.73 trillion in the same period a year earlier.

Its net interest income rose 19 percent to Rp 7.2 trillion from Rp 6.1 trillion a year earlier. Outstanding loans at BNI increased 17 percent to Rp 179.4 trillion from Rp 152.9 trillion.

Shares of Mandiri gained 2.6 percent to Rp 7,850 on the Indonesia Stock Exchange on Monday, while BCA’s fell 0.6 percent to Rp 7,950. The banks announced their results after the market closed at 4 p.m. in Jakarta.