JAKARTA: Several major banks recorded a significant increase in profit during the first half of this year as boosted by credit expansion, commission income, provisioning drops, and sale of subsidiary shares.According to the financial reports for the first half of 2011, profits in several banks even soared over 40% although several others were stagnant or slightly dropped.Several major banks simultaneously released financial reports today, including three banks with the largest assets namely PT Bank Mandiri Tbk, PT Bank Rakyat Indonesia Tbk, and PT Bank Central Asia Tbk.PT Bank Negara Indonesia Tbk, the fourth largest bank, posted IDR2.73 trillion profits or grew 41% as its credit provisioning dropped. Meanwhile, the profit of PT Bank Danamon Indonesia Tbk, the sixth largest bank, rose 3% to IDR1.47 trillion as its credit grew by 31%.PT Bank UOB Indonesia has recorded the highest profit gain percentage with 81.98% to IDR404 billion, followed by PT Bank Muamalat Indonesia Tbk, BRI, Bank Mandiri, PT Bank Bukopin Tbk, and BNI.BRIs profit rose 57.1% to IDR6.78 trillion from IDR4.31 trillion a year earlier, gaining the largest profit as in previous years.Bank Mandiris profit grew 56.7% or IDR6.3 trillion as supported by the growing noninterest revenue, which rose 68.6% to IDR6.18 trillion compared to IDR3.66 trillion in the same period a year earlier.Bank Mandiris President Director Zulkifli Zaini said its net interest income rose 14.6% to IDR10.38 trillion from IDR9.06 trillion. In fact, he asserted that the bank could achieve greater income if the benchmark of recapitalization bond interest rate remains unchanged.Since the auction of BIs three-month certificates was eradicated, the yield of recapitalization bond is declining because it refers to the result of lower Treasury Bill (SPN) auction."Our recapitalization bond was quite high over IDR70 trillion. The SPN wasnt as higher as BIs three-month certificate, which makes our profit not higher than we have expected," he said.Early this year, Bank Mandiri gained extraordinary income from the sale of 11% stake in PT Garuda Indonesia Tbk, which grabbed IDR1.4 trillion funds and its fully recorded as profit. Remove credit administration management book also gives clear profit.PT Bank Permata Tbk recorded a 32% increase in profit to IDR695 billion from IDR527 billion, driven by 36% growth in credit to IDR59.7 trillion from IDR43.9 trillion.Bank Permatas President Director David Fletcher said retail business also contributed to the increase in profit. We will continue to improve the infrastructure and capability to gain opportunity, he added yesterday.BCAs profit rose by 20.4% to IDR4.79 trillion from IDR3.98 trillion as its net interest income rose by 43.3% to IDR8.03 trillion from IDR5.6 trillion.The companys increased the portion of excess liquidity placement in deposits at Bank Indonesia, which leads to such increase in net interest income, BCAs President Director Jahja Setiaatmadja said.Strong connectionBank positive performance shows strong connection between financial company and economic growth. "When investors want to taste strong economic growth in Indonesia, they purchase banking shares since the growth in this sector is strongly associated with national economic conditions," PT GMT Asset Management Analyst Niko Simatupang assessed.On the other hand, banking function as a movement path for liquidity would be advantaged amidst the strong capital inflows. Bank is not experiencing a shortage of liquidity since the foreign capital flow is still high.Today, bank stocks are predicted to be purchased as primary portfolio amidst bullish market. Its only overshadowed by the possibility of fuel price hike that will boost inflation.Niko recommended the investor to purchase shares of three banks that have stronger performance in long-term, i.e. Mandiri, BRI, and Bukopin.BMRI-coded stock is targeted to reach IDR8,500 from yesterdays closing at IDR7,900, BBRI-coded stock is targeted at IDR7,000 from IDR6,800, while BBKP-coded stock at IDR1,000 from IDR850.Financial stock index, which is dominated by banking, weakened 1.03% to 541.82 yesterday after strengthened two days earlier at 2.4% and 1.37% and created capitalization of IDR950 trillion. (20/Arif Gunawan S./Hendri T. Asworo)(t06/msw)

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