Bad loans cut Temasek banks profit

PT Bank Danamon Tbk and PT Bank Internasional Indonesia Tbk, both affiliated with Temasek Holdings, reported significant drop in net profit for first half 2006 mainly due to increasing operational costs and assets write-off.

Danamon booked Rp558 billion net profit, axed by 56% from Rp1.28 trillion in H1 2005. BII recorded Rp352 billion, reduced 11.3%.
Danamon actually reported 16% growth in net interest margin (NIM), but the company had to write-off Rp533bn assets while operating expenses increased significantly.
BII also reported better NIM, but it had to write off Rp196bn assets.
Both banks reported significant increase in loss category (V) and special mention loans (II). Danamon's V category loans at Rp733bn, doubled from Rp331bn in H1 2005 while BII's increased from Rp322bn to Rp487bn.
Danamon's special mention loans at Rp3.8 trillion (against Rp2.9 trillion in H1 05), BII at Rp2.37 trillion (Rp1.09 trillion).

READ MORE!!!