REPUBLIKA.CO.ID, JAKARTA -- Publicly traded lender PT. Bank Permata Tbk is optimistic to perform better this year after last year's poor performance.

Last year the bank, which is jointly owned by Astra International and Standard Chartered Bank recorded net profit only at Rp247.1 billion shrinking 84 percent from the previous year.

This year the bank hopes to expand credit by as much as 12 percent and in the second half of the year it plans right issue hoping to raise Rp5.5 trillion in fresh fund to strengthen its capital.

With the fund from the right issue, the bank's capital would rise to around Rp24 trillion improving its capital adequacy ratio (CAR) to 17-18 percent, up from 15 percent at present, its President Director Roy A. Arfandy.

Astra International and Standard Chartered Bank have pledged to buy all of the new shares , Roy said here on Tuesday.

He said this year , the bank would continue to be focused on expanding domestic market, adding it has no ambition yet to operate beyond the country's border.

The plan to strengthen its capital is to improve the quality of its assets , he said.

He predicted that the process of economic recovery is faster and more consistent this year opening greater opportunity for expansion in banking business.

"We see the huge potential in domestic economy . We want to play more exploiting the domestic potential this year," he said.

Earlier this month Roy said the bank would cut its interest rate on deposits to be followed with lending rates by phases.

"First we would cut interest rates on deposits to follow the decision of Bank Indonesia cutting its benchmark interest rate (BI rate) by 25 basis points," he said.

He said the bank could not cut the interest rates on time deposit all at once as the deposits have different maturity dates.

The bank would follow the interest policy of the government that calls for cutting lending rate to less than 10 percent, he said.

The size of the cut would not be the same depending on the risk factor, he said.

"Long term and short term credits certainly are not the same in risks," he said.

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