Sunday, September 25, 2011

INDONESIA - BANKING - Mega Syariah's assets shrink by IDR200 billion

JAKARTA: PT Bank Mega Syariah, a sharia-based bank belonging to tycoon Chairul Tanjung, saw its assets shrink by IDR200 billion, or 4.3%, because of lower deposits at end of August.

The bank's assets reached IDR4.4 trillion at end of August, decreasing from IDR4.6 trillion at end of 2010, said President Director Beny Witjaksono. (source)


The decrease has been occurring since mid of the year, when the bank had IDR4.48 trillion assets at end of June. However, the performance in the past two months could not improve its assets.

Beny reasoned that shrinking assets were lower third party funds, mainly in term of high cost of bank deposits. “We reduce third party funds for better productivity,” he said Thursday.

He believed that the strategy would increase the portion of low-cost funds, i.e. savings and current accounts, to 32% and let the rest go to high cost fund. The portion of low cost funds at end of 2010 was not more than 20%.

Lower third party fund at the same time elevated the finance to deposit ratio to around 87%-89% compared to 80% at end of 2010.

Beny seemed optimistic that the bank’s assets would grow in 2011 as third party fund may come back later this year.

“Third party funds often decrease in the mid of a year and will recover at year-end,” he said.

In 2010, Bank Mega Syariah booked conservative growth in assets, about 6%. Meanwhile, the bank recorded a considerably rapid growth of 41% in the previous year.

Financing portfolio also had the similar condition. The outstanding credit was IDR3.2 trillion in 2010, changed a little compared to that of 2009. In the meantime, the growth of financing in the industry of sharia banking was 45.41% in 2010.

Beny added that bank sets conservative target for financing expansion this year, as it is focusing on human resources and information technology system. (20/T04/NOM)

Source : http://en.bisnis.com/articles/mega-syariahs-assets-shrink-by-idr200-billion  - Sept 23, 2011

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