Maybank plans to further boost BII operations

Maybank plans to further boost BII operations

Raras Cahyafitri, The Jakarta Post, Kuala Lumpur | Fri, 02/24/2012 9:59 AM

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Tribunnews.comMalayan Banking Berhad (Maybank) will expand the operations of Indonesian subsidiary PT Bank Internasional Indonesia Tbk (BII), in a bid to take advantage of solid economic growth in the country, the financial group’s president and chief executive officer Abdul Wahid Omar says.

Omar said that Indonesia’s high economic potential has made it possible for financial institutions, such as BII, to strengthen business in the country. He also expected that the Indonesian bank would become one of the main sources of revenues to Maybank in the future.

Omar said that the Malaysian bank expected to see growth of 15 percent this year, with BII to exceed that growth.

“Obviously, a big portion of that will be driven by growth from Indonesia. We expect BII to grow by more than 20 percent,” he said during a press conference about his company’s financial reports on Thursday.

The Indonesian government expects economic growth of 6.7 percent this year, which is far higher than the growth forecasts for Malaysia (3.5%) and Singapore (4%) — two countries that make up the bulk of Maybank’s business.

Maybank reported a net profit of RM 2.58 (US$854 million) for the six months ending Dec. 31, 2011, an increase of around 20 percent from the RM 2.15 billion recorded in the same period in 2010.

Last July, Maybank changed the end date of its financial year from June 30 to Dec. 31.

Maybank, the largest financial services group in Malaysia, saw its net interest income increase by 12.2 percent to RM 4.89 billion over the last six months of 2011, from RM 3.59 billion in the same period in 2010.

The company’s fee-based income stands at RM 2.93 billion, 32 percent higher than the RM 2.22 billion reported in the last six months of 2010.

Gross loans rose 16.2 percent to RM 282 billion in December 2011, from RM 261 billion recorded last June. It comes after loans rose 23.7 percent to RM 228.7 billion in the same period in 2010.

Maybank’s loan-to-deposit ratio currently stands at 87.5 percent, while the net impaired loan ratio is at 1.86 percent.

Maybank deputy president and group chief financial officer Khairussaleh Ramli said that BII contributed about 16 percent of the banking group’s consolidated revenues.

“The profit contribution now is only less than 5 percent. But again, given the high growth in Indonesia, the intention for growth is for Indonesia to contribute a much bigger (proportion),” said Khairussaleh, who was recently appointed as BII president director.

BII, which is 97.5 percent controlled by Maybank, reported a 45 percent increase in profits to Rp 669 billion ($77 million) in 2011, from Rp 461 billion in 2010.

The opening of more branches will be one of BII’s strategies to improve its performance this year.

Khairussaleh said that BII aims to open up to 50 branches this year.

“However, what is more important is to make sure branches that we have will be more efficient. At the moment we have about 360 branches,” he said.

According to figures provided during Thursday press briefing, during the financial period of July to December, Maybank added six new branches in Malaysia to reach a total of 392 branches.

Seven new branches were opened in Indonesia to reach a total of 346 branches. Five were opened in the Philippines to reach 50 branches in total, and one opened in Cambodia to reach 11 branches.

“In Malaysia, we are looking at places (that may get new branches). But, primarily, the expansion will be in Indonesia,” Khairussaleh said, declining to reveal how much the expansion would cost.

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