Corporate Earnings Report Indonesia Q3-2018: Bank Negara Indonesia
Indonesia's biggest banks seem to have done good business in the third quarter of 2018. After the positive Q3-2018 corporate earnings of Bank Mandiri that were released earlier this week, another major bank in Indonesia - Bank Negara Indonesia (BNI) - now shows similar positive numbers.
Bank Negara Indonesia (BNI) is the fourth-largest bank that is listed on the Indonesia Stock Exchange with a market capitalization of IDR 133 trillion (approx. USD $8.87 billion).
Based on the company's corporate earnings report that was released on Thursday (18/10), BNI recorded a 12.6 percent year-on-year (y/y) rise in net profit to IDR 11.44 trillion (approx. USD $763 million) up to the end of September 2018. Meanwhile, third-party funds climbed 14.2 percent (y/y) to IDR 548.59 trillion (approx. USD $36.6 billion) over the same period.
BNI Finance Director Anggoro Eko Cahyo said the bank's rising net profit comes on the back of net interest income growth and an improvement in the quality of assets.
Credit growth of BNI was recorded at a rate of 15.6 percent (y/y) reaching IDR 487.04 trillion in the first three quarters of 2018, specifically supported by strong growth of corporate credit disbursement (which rose 18.5 percent y/y). Cahyo said BNI targets to see its full-year 2018 credit growth at the range of 13-15 percent (y/y).
Bank Negara Indonesia's Financial Highlights:
| September 2017 |
September 2018 |
Growth (Y/Y) |
|
| Net Income | 10.16 | 11.44 | +12.6% |
| Credit | 421.40 | 487.04 | +15.6% |
| Third Party Funds | 480.53 | 548.59 | +14.2% |
| Total Assets | 668.20 | 763.52 | +14.3% |
| Non Performing Loan (NPL)¹ | 2.8% | 2.0% | |
| Net Interest Margin (NIM) | 5.5% | 5.3% |
in trillion IDR rupiah unless otherwise stated
¹ gross
² in IDR rupiah
Source: Bank Negara Indonesia, Financial Report Q3-2018
According to Cahyo the rising interest rate environment in Indonesia (with Bank Indonesia having raised its benchmark interest rate from 4.25 percent to 5.75 percent over the past couple of months) means that companies can expect to generate less funds from the stock market and therefore they are bound to turn to banks for loans in order to finance business expansion. This would be positive for BNI's credit disbursement in the period ahead.
It is also worth noting that BNI announced that it will stop disbursing credit (mortgages) for consumers' purchases of Meikarta apartments. Meikarta is a huge USD $21 billion real estate project in Bekasi (West Java). However, a corruption scandal emerged over the past week as Indonesia's anti-graft agency (KPK) arrested staff and raided homes and offices of senior executives from the Lippo Group, the Indonesian conglomerate that is behind the Meikarta project. Several Lippo Group executives and staff-members are under suspicion of bribing local officials.
While shares of BNI had not changed in the first trading session of Friday (19/10), the bank's shares have tumbled 26.34 percent to IDR 7,200 a piece so far in 2018. Being a member of the blue chip stocks, shares of BNI have become victim of this year's massive capital outflows from emerging markets, including Indonesia, amid simmering trade concerns and the US Federal Reserve's monetary tightening.
Stock Quote Bank Negara Indonesia - BBNI:
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