PT Bank Internasional Indonesia, partly owned by South Korea's largest lender, Kookmin Bank, said profit fell 13 percent last year after it set aside more money to cover bad loans.
Net income fell to 634 billion rupiah ($70 million) in 2006 from 725 billion rupiah a year earlier, the bank said in a faxed statement in Jakarta today. Bad-loan provisions more than tripled to 702 billion rupiah from 183 billion rupiah.
Bank Indonesia raised its policy rate to 12.75 percent in December 2005, before starting to cut borrowing costs in May, to stem inflation from the government's move to more than double fuel prices. That led to a spate of delinquencies, the Jakarta- based bank said id.
"Consumer default rates, particularly in the auto industry, rose in 2006, driven by the interest-rate increase, lower consumer confidence and spending,'' the bank said.
Net interest income rose 12 percent to 2.62 trillion rupiah in the period. The company's shares fell 2.3 percent to 215 rupiah in Jakarta today.
Thursday, February 22, 2007
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