Income Foreign Banks in Indonesian Shine

The performance of foreign branches (KCBA) operating in Indonesia sparkling. Call it the Citibank and The Hongkong and Shanghai Banking Corporation Limited (HSBC), enjoy increased profits first semester of 2012. Based on the financial statements, profit and Citibank first half of the year rose 69 percent to Rp 1.1 trillion. Meanwhile, HSBC posted a profit of about 65 percent to Rp 711 billion. 

Both banks recorded a profit growth above average. As a comparison, based on data from Bank Indonesia (BI), as of the end of June, the average earnings of foreign banks in the country grew 49 percent a year. One cause of the increase in both the foreign bank's profit is their success rate cut operating expenses instead. Citibank for example, cut non-interest operating expenses 45 percent to Rp 536 billion. Load components shrink them, post spot and derivatives, operational risk losses and commission expense or provisi.HSBC also successfully suppress non-interest operating expenses. So that it can reap non-interest operating income of Rp 77.68 billion.

 While the increase in the bank's core business, which is arguably the interest income is not so significant. Citibank, for example, recorded an increase in net interest income or net interest income (NII) was just 3.36 percent to Rp 1.54 trillion. While HSBC noted NII growth of 3.03 percent to Rp 1.09 trillion. In fact, in terms of loan portfolio grew 15.3 percent to Rp 35.4 trillion. "The corporation is HSBC's core business, contributing 75 percent-80 percent," said SPV Finance and Deputy Chief Finance Officer of HSBC Indonesia, Hanna Tantani. The remaining consumer business and retail. Citi reluctant indulgence recipes that reduce operational costs. "Our long-term vision, so that the focus and priorities of the company and customer satisfaction. We believe will produce consistent income," said Tigor M. Siahaan, Citi Country Officer Indonesia, Wednesday (08/29/2012) night. But, there is also a record KCBA loss, namely Bank of America Merrill Lynch. He recorded a loss of USD 957 million, while a year earlier profit was Rp 32.75 billion. One reason is, shrinking net interest income of Rp 36.08 billion to Rp 10.6 billion. (Nina Dwiantika, Sanny Cicilia / Cash)