Non Interest Income Increased by 50%, Bank OCBC NISP Stays Prudent
Bank OCBC NISP’s Financial Highlights for the First Semester 2009
Bank OCBC NISP which was just awarded as one of Asia’s best companies in Asia’s Best Companies Award held by Finance Asia Magazine, Hong Kong, and Retail Bank of the Year – 2009 from Asian Banking and Finance Magazine, Singapore, announced its financial result for the first six months of its operational in 2009, today, Wednesday 29 July 2009.
During the first semester 2009, the Bank has successfully booked net income of IDR 162.3 billion or grew by 10.4% compared to the same period in 2008. The growth was attributable to the increase in net interest income by 26.6% from IDR 654.6 billion to IDR 829 billion and increase in non interest income by 50.3% from IDR 185.3 billion to IDR 278.4 billion. The high growth of non interest income was contributed by the gain from foreign exchange transaction which grew by 188.4%. More over, the Bank’s success in reducing its Cost to Income Ratio from 70.6% at the end of June 2008 to 61.6% at the end of June 2009 also supported the growth of the Bank’s net income.
Negative growth in credit (-6%) as shown on the table, among others, were caused by higher installment compared to the new loan booked. In addition, Bank is very selective in disbursing loan considering the unstable global economy, which has urged the Bank to stay more prudent in disbursing its loan.
Continuous implementation of prudential banking practice, as well as diversified portfolio have resulted the Bank’s NPL gross Ratio on the level of 3.91% as of June 2009, or lower compare to banking industry which reached 4.4% on May 2009, and NPL Net ratio was 1.89% way below maximum allowed level by Bank Indonesia of 5%.
Based on sectors the Banks distributed its loans to Manufacturing (24.2%), Trading (23.3%), Services (16.9%), Consumer (30.6%) and others (5%). Parwati Surjaudaja explains,” By disbursing loan to various economic sectors we are able to maintain our NPL on the manageable level.”
Furthermore, Bank OCBC NISP were also successful to increase its funds from IDR 21.3 trillion at the end of June 2008 to IDR 27.3 trillion at the end of June 2009, or an increase of 28.2%. Beside the increase in total amount, the Bank has also been successful in reaching better funding composition by increasing its low cost fund portion, therefore achieving lost cost funding ratio of 48.7%, where as at the end of March 2009, at the ratio was 43.4%.
The significant increase in customer deposits compared to the growth of loans has resulted Loan to deposits ratio decrease to the level of 69.4% at the end of June 2009 compare to 95% at the end of June 2008. “We consider this as an ideal level of LDR in time of current macro economic condition as we need to be more prudent and continuous implement the prudential banking principal during this condition with high uncertainties. If, in the future, the economic condition has become more stable, we will of course increase our LDR again”, Parwati added
Profile of OCBC NISP
Bank OCBC NISP, previously named Bank NISP, was established in 1941 in Bandung. Currently the Bank has a network of 366 offices and 539 ATMs in 62 cities in Indonesia which are part of network of more than 22,000 ATMs (including ATM Bersama, BCA, OCBC Bank-Singapore and BankCard-Malaysia); it is well supported by 5,437 employees. In maintaining its business, which is focused on the SME and consumer sectors, Bank OCBC NISP has received wide-ranging support from OCBC Bank, its controlling shareholder (74.73%). Another shareholder which also has actively supported the Bank is IFC-World Bank Group, which since 1997 has supported the Bank in different forms, including capital, long term loan, technical assistance, and others.
Bank OCBC NISP is one of the highest rated banks in Indonesia, with AA+(idn) for National Long Term and BB(idn) for Long-Term Foreign and Local Currency from FitchRatings and idAA- for Corporate Rating and idA+ for Subordinated Bond from PEFINDO (affiliated of Standard & Poor’s).
Various acknowledgements from international and local institutions were received by Bank OCBC NISP. Recently, the Bank has been awarded as one of Best Mid Cap in Asia’s Best Managed Company Award held by FinanceAsia Magazine, Hong Kong. In addition, at the beginning of 2009, Bank OCBC NISP was elected as Retail Bank of The Year – 2009 in Asian Banking & Finance Retail Banking Award held by Asian Banking & Finance Magazine, Singapore. Mean while, during 2008 Bank OCBC NISP categorized as “Trusted Company” (Perusahaan Terpercaya) in the Corporate Governance Perception Index (CGPI) Award, Best FX Prime Booking Services and Best Single-Bank Electronic Trading Platform from Asiamoney Magazine – Hongkong, Annual Report Award (2nd place) Private Listed Financial category, and 2 awards from InfoBank Magazine - Golden Trophy Award 2009 for “Excellence Performance for 5 Consecutive Years (2004-2008) and Banking Service Excellence Award 2008/2009.
Profile of Controlling Shareholder: OCBC Bank Singapore
OCBC Bank is Singapore’s longest established bank with group assets of S$180 billion (as of March 31, 2009). Its full spectrum of specialist financial services solutions is delivered through a network of more than 470 branches and representative offices in 15 countries and territories, including Singapore, Malaysia, Indonesia, China, Hong Kong SAR, Brunei, Japan, Australia, UK and USA. Its insurance subsidiary, Great Eastern Holdings, is the largest insurance group in Singapore and Malaysia in terms of assets and market share, and its asset management subsidiary, Lion Capital Investors, is one of the largest asset management companies in Southeast Asia.
OCBC Bank is of one of the highest credit ratings among the banks in Asia, with long-term ratings of Aa1 from Moody’s, AA- from Fitch, and A+ from Standard and Poor’s. During the first quarter 2009, OCBC Bank Singapore has received much recognition, such as Best Retail Bank and Excellence in Customer Advocacy in The Asian Banker Excellence in Retail Financial Service Award 2009 held by The Asian Banker Magazine, Singapore. It also hold the category as one of the 50 safest bank in the world as announced by Global Finance Magazine – New York. Meanwhile, during 2008, OCBC Bank Singapore received “Best Foreign Cash Management Bank” in Asiamoney’s Poll Among Small, Medium & Large Corporate in Malaysia 2008, and Ranked 1 in Top 5 Regional Banks Category: Asia Risk End User Survey 2008, and Best Cash Management Bank Country Awards from Finance Asia Magazine 2008. For additional information please visit www.ocbc.com