Bank Jabar Banten’s profit increased 15.11% up to Rp 142 per share

PT Bank Pembangunan Daerah Jawa Barat dan Banten, Tbk (BJBR) booked an increasing earnings per share of Rp 142 in 2013 compared to the previous year of Rp 123,  pushed by significant rise of the net interest incomes and the operational revenues. At market closing on Friday (14/3), Bank Jabar Banten’s share was Rp 1,045 (0,97%) with price to earnings ratio (PER) at 7.36 times or below than the market and banking PER around at 18.3%.

 

The bank’s interest income increased by 19.68% to Rp 8.13 trillion in 2013, rose from Rp 6.80 trillion in 2012. This increase was due to higher of the bank’s credit.

With the cost of fund manageable and only rose by 6.70% to Rp 3.35, from Rp 3.14 trillion, net interest margin spiked significantly by 30.82% to Rp 4.78 trillion from Rp 3.66 trillion. 

The bank’s other operating revenues increased by 38.41% amounting to Rp 457.26 billion compared to last year of Rp 330.36 billion. It was dominated by fees and commission of the bank that hiked by 22.58% amounting as Rp 268.72 billion and recovery of loan write-off that increased by 85.13% amounting to Rp 136.14 billion.

Meanwhile, the operational income of the bank increased higher than the revenues. It made operational income slightly pressured and just rose by 23.44% amounting as Rp 1.75 trillion compared than last year as Rp 1.42 trillion.

Operational expenses rose by 35.88% valued at Rp 3.49 trillion compared than the year before at Rp 2,57 trillion caused by increasing of general and administrative expenses, salaries expenses, lost in marketable securities and impairment loses of financial assets.

General administrative expenses of the bank increased by 27.45% amounting as Rp 1.26 trillion compared to 2012 that was Rp 986.24 trillion. Salaries expenses hiked 30,87% up to Rp 1.27 trillion from Rp 967.34 billion, and impairment loses of financial asset rose by 52.72% to  Rp 616.07 billion from Rp 403.39 in 2012.

Despite the bank’s significant revenue growth, even above the industry projection by BI of 18% - 21%, the net income only increased by 15.11% or below of the industry at 17%-19% caused by inefficiency in managing operational expenses. 

The bank’s net profit just increased to Rp 1.37 trillion compared to Rp 1.19 trillion in 2012, with the return on equity slightly up to 26.76% from 25.02% in 2012.

Tiny growth in asset but loan was soaring

The bank’s asset just rose by 0.17% to Rp 70.96 trillion from Rp 70.84 in 2012, but loan and financing spiked to 27.66%.

Asset growth was restrained caused by decreasing assets that were placed at BI by 46.04% to Rp 6.12 trillion from Rp 11.34 trillion in 2012.  The placements in other bank also shrank by 29.87% to  Rp 1,14 trillion compared to 2012 at Rp 1.62 trillion and the  marketable securities that purchased under agreements to resell (reverse repo) was also recorded  released along as 2013 compared than the year of 2012 was booked by Rp 11.57 trillion.

An aggressive growth of loans and financing showed that the bank’s management chose to maintain the profitability rather than maintaining in asset qualities as indicated by the increase in non-performing loans even though faced with the challenge of liquidity. 

This may prove a challenge to the bank in the future.