BII picks 6 underwriter

PT Bank Internasional Indonesia Tbk picks 6 securities companies to arrange IDR6 triliun bond sale. The firts step, BII will sell IDR2.5 trilion senior bonds and IDR500 billion subordinates bond (subdebt bond).

Subdebt bond has become alternative among banks to boost up the (capital adequacy ratio/CAR). Half of the bond issuance could be used for the entrance to second tier so the CAR of a bank is increasing.

PT Bahana Securities, PT DBS Securities Indonesia, PT Indo Premier Securities, PT HSBC Securities, PT Kim Eng Securities, and PT OSK Nusadana Securities will help BII to sale the bonds.

BII last week announced net income in the six months ended June 30 rose 13 percent from a year earlier to IDR367 billion. BII registered a 19% rise in gross operating income for the 12 months ended June 2011 to IDR6.04 trillion from IDR5.07 trillion a year earlier.

Net interest income surged 21.8% to IDR4.03 trillion despite a narrowing of net interest margin from 5.63% in June 2010 to 5.43% in June 2011, while non-interest income grew 13.8% to Rp2.01 trillion.

Profit before tax rose 28.8% to IDR782 billion from IDR607 billion a year earlier. Loan loss provisioning rose 20.1% to IDR1.26 trillion, mainly due to higher provisioning for WOM Finance’s portfolio related to its venture into second hand motorcycle financing. However, WOM has now curtailed the financing for this segment and is redefining the used motorcycle financing business model and distribution model to improve its asset quality.

BII saw asset quality continue to improve with net impaired loans ratio declining further to 1.22% in June 2011 from 1.87% in June 2010. Its capital position remains strong with Capital Adequacy Ratio at 13.06% in June 2011 compared with 12.50% in December 2010.

BII’s network expansion remains on track with 70 branches opened in the past 12 months bringing the total to 344 as at June 2011. The number of self service terminals throughout the country has also risen significantly over the past year from 844 in June 2010 to 1017 in June 2011.