BII was presented with plenty of low-hanging fruit in 2004. As interest rates eased lower, it offloaded fixed-rate government bonds on its balance sheet and built up its loan book. The strategy paid off after interest rates bottomed out and the bank’s government-issued variable-rate bonds became more attractive. As a result of aggressive loan expansion, the bank’s loan/deposit ratio has risen to 60%.
The other side of the balance sheet also underwent a revamp. Time deposits that had long formed the lion’s share of liabilities were shifted into current accounts, giving an even 50%/50% split that cut its cost of funds. BII has more than 250 branches and 700 ATMs across the Indonesian archipelago and overseas branches in four countries.
