REPUBLIKA.CO.ID, JAKARTA -- PT Bank Pembangunan Daerah Jawa Timur (Bank Jatim) reported Rp543.28 billion in net profit the first half of the year or 3.49 percent down on-year.

President Director of the bank, which is owned by the provincial administration R. Soeroso attributed the decline in profit to rising cost of fund and an increase in non performing credit (NPL) ratio.

"Our net profit was diluted and NPL was still high though the trend is narrowing," Soeroso said here on Wednesday.

The NPL of the bank has continued to decline , down from 4.6 percent in May to 3.82 percent by the end of June, he said.

"Our target for NPL is set at 2.8-3.1 percent by the end of this year," he added.

Meanwhile the bank's cost of fund rose to 3.95 percent in the first six months of this year from 3.81 percent in the same period last year.

The bank recorded outstanding credit at Rp28.29 trillion by the end of June or an increase of 14 percent on-year and by the end of this year the growth is forecast to be around 17 percent-20 percent on-year.

The bank posted Rp42.69 trillion in third party funds or an increase of 20.3 percent by the end of June and by the end of this year the growth is forecast to be around 15 percent - 17 percent on year.

"The target for net profit in the whole year is set at 15-18 percent," Soeroso said.

The assets of the bank were valued at Rp50.23 trillion or an increase of 19.18 percent on-year.

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