10 Banks with Smallest Earnings

Performance of small banks, haunted by the migration of funds and take over loans by large banks. They (small banks) must be willing to suppress margins. How small bank profits portrait during 2013?

ACHIEVEMENTS bank earnings during 2013 was as beautiful as in previous years. National banking industry faced severe enough conditions rising in line with government policies to maintain economic stability and the banking regulator policies aimed at improving the quality of bank credit in the country.

On the other hand, rising interest rates have resulted in higher cost of funds in the banking system. As a result, the fund Tussle war, increasingly stringent. This liquidity tightening effects on credit banking performance. This condition makes the net interest margin (NIM) of the bank increasingly depressed and exhaust banking revenue gains. Not just the big banks, so the condition is also "hit" small banks. The initiative, a tightening of liquidity result in a migration of funds from a number of banks (which included small banks) to banks who dare offer higher interest rates and profitable customers. If this phenomenon persists in the long term, it would imply revenue gains from bad to smaller banks, especially for banks that have been previously in the underperforming category.

In order to foster a profit, banks are increasingly agile seek additional fee based income by leveraging its technology. The question is, how many banks have large pockets to have a system that is capable technology? Although there are, of course there are many small capacity that way. "With our scale, ATMs only be complement in small banks. Because ATM is not profitable, but its just a cost center, "said Edy Kuntardjo, President Director of PT Bank Ina Prime Tbk. Then, what kind of portrait of a small bank profits throughout 2013? Based on data from the Infobank Research Bureau  (IRB), a group of commercial banks in business activities (NCBBA) 2 there is a loss-making bank 1 and 5 banks with negative earnings growth. Meanwhile, in NCBBA group 1, there are 2 banks posted losses and 13 banks are not able to record profit growth.


Based on the study Infobank Research Bureau data, 10 banks with the smallest profit achievement of a total of 120 banks is Mutiara Bank, Bank QNB Kesawan, Andara Bank , Amin Bank, Bank Artos Indonesia (Artos Bank), Bank Sahabat Purba Danarta, Bank Niaga Partner, Royalbank, Centratama National Bank (CNB Bank), and Bank ICB Bumiputera. Of the 10 banks, of which three banks posted losses, the Bank QNB Kesawan, Andara Bank, and Mutiara Bank. The data processed by the Infobank Research Bureau September 2013 showed, Bank QNB Kesawan recorded losses of Rp36, 02 billion. When compared with the same period in 2012, the losses suffered in the more Kesawan QNB Bank with 10.88% of the decline reaching Rp 32, 49 billion. The same is experienced by the Bank Mutiara. As of September 2013, Bank Mutiara recorded substantial losses of up to Rp 645, 51 billion. The income position declined significantly from Rp 143, 59 billion in September 2012 to reach 549.55% profit decline.

Throughout last year, the bank's condition continued to deteriorate. Capital adequacy ratio (CAR) declined due to the rise of non-performing loans in the bank. The ratio of non-performing loans (NPLs) gross bank that continues to invite debate in parliament reached 10.92% in June 2013. Declining health Mutiara Bank invites the government to re-nourish the intervention of banks led Sukoriyanto Saputro. Mutiara Bank get temporary investments (PMS) of the government of Rp 1.5 trillion to shore up its capital position to 14%. Meanwhile, Andara Bank is a little better than Bank QNB Kesawan and Mutiara Bank. Despite the loss, the bank's earnings performance has improved. Loss suffered by the Andara Bank was reduced from Rp 5, 31 billion in 2012 to just Rp 3, 49 billion in 2013. Means that the bank's profit grew by 34.29% Andara. Bank QNB Kesawan addition, there are three more banks were not able to record profit growth, the Bank Sahabat Purba Danarta, CNB Bank, and Bank ICB Bumiputera. Bank Sahabat Purba Danarta profit decreased by 85.17% from Rp 9.00 billion to Rp 1.34 billion, while earnings CNB Bank and Bank ICB Bumiputera respectively decreased by 79.79% and 8.40%.

From the list of the 10 smallest profit earning bank data showed that there is a single bank earnings growth is quite astonishing. Bank profit growth Artos Indonesia (Bank Artos) as of September 2013 reached 783.33%. Artos Bank Profit for the period increased from Rp 48 million to Rp 424 million into September 2012. Artos soaring bank profits also contributed by net interest income rose by 18.04%. NIM of banks led Reinantha this Yaputra increased from 5.92% in September 2012 to 6.46%.

The increase in interest income was a result of the expansion of bank credit Artos whoose result on credit growth of 26.04%. Entering early 2014, small banks are still struggling and competing fiercely with banks larger (its size) in the race for public funds. To prevent the transfer of funds from large customers, such banks would not want to contribute to increase the savings rate. "If the big banks are offering high interest bravely, customers can move. We communicate transparently how the health condition of our banks, as well as service and its relationship remained improved, then they will still stay. But, inevitably the cost should go up so that only a thin margin. Thus, the severe effect, is growing cost of funds , "said Hendra Lie, Director of Dinar Bank Indonesia.

Performance Dinar Bank Indonesia (Bank Dinar) recorded increasing after rebranding of Liman International Bank to Bank Indonesia Dinar. Under Infobank Research Bureau data, up to September 2013, the position of the current account and savings account (CASA) portion Dinar Bank reached 15.66%, while the position of deposits reached 84.34%. As of December 2013, total deposits (deposits) that banks fully focus on retail banking is increased significantly by 133.89%. During the period, Dinar Bank's profit reached Rp 8,5 billion, up to 49.12% compared with the same period in 2012 which amounted to Rp 5, 7 billion.

Small banks not only haunted by the war of funds by large banks, but also in terms of lending. To boost his credit, major banks intensified enter the micro, small, and medium enterprises (SMEs) that have been the land of small banks. Market competition in the SME lending was inevitable. Moreover, reportedly, a lot going on offer take over a small bank customer credit by major banks.

According Kartika Wirjoatmodjo, Chief Executive of the Deposit Insurance Agency (LPS), with a variety of challenges, tightening liquidity becomes an important issue that must be observed. "If an expensive source of funds, the bank will automatically find a more risky loans to find the margin. It could be a business cycle later. And, if the view of current conditions there are still banks that should do it. Be careful, the bank failed was caused by two things: the first due to fraud and second because of competitiveness, "he said.