Panin, Mega Post Strong First Half Income

By webadmin on 03:55 pm Aug 01, 2012
Category Archive

Jakarta Globe

Two medium to large-sized lenders posted strong first-half profit on the back of low borrowing costs and Indonesia’s continued economic growth.

Bank Panin, owned by businessman Mumin Ali Gunawan, booked a 37 percent year-on-year rise in net income to Rp 1.15 trillion ($122 million) in the January-June period.

In the same period, net income at Bank Mega, controlled by billionaire Chairul Tanjung, more than doubled to Rp 909.54 billion from Rp 431 billion last year.

Shares at Bank Panin, the country’s seventh-largest lender by assets, rose 1.4 percent to close at Rp 720 on the Indonesia Stock Exchange on Tuesday, while Bank Mega’s shares fell 3.1 percent to Rp 3,100.

Both Panin and Bank Mega booked healthy net interest income on the back of strong lending growth. Net interest income refers to the amount of money a bank receives from interest on assets like commercial loans and mortgages minus the amount of money it pays out for interest on liabilities like personal bank accounts.

Panin’s net interest income rose 11 percent to Rp 2.65 trillion, while Bank Mega’s rose 50 percent to Rp 1.13 trillion.

“The earnings outcome of Indonesian lenders in general is in line with expectations for strong growth in the sector this year,” said Jeffrosenberg Tan, fund manager at Sinarmas Asset Management. “Loan growth is likely to remain high this year on the back of strong economic growth, low borrowing costs and a low inflation rate.”

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.