Jakarta – A total of 72 national banks suffered combined losses of Rp38.7 trillion (US$5.5 billion) last year, while 92 others managed to register profit, a study said.

The study conducted by the research bureau of Infobank magazine on 164 national banks, a copy of which was made available on Thursday, suggested the loss was lower than the previous year's Rp62.49 trillion.

By September 1999, among the banks suffering the greatest loss were those taken over by the government or joining the recapitalization program. They were Bank Niaga (JSX:BNGA), Bank Danamon (JSX:BDMN), Bank Duta, BII (JSX:BNII), Lippo Bank (JSX:LPBN), Bank Universal (JSX:BUNV) and state banks Bank Mandiri, BTN and BNI (JSX:BBNI).

Despite the losses, most of the banks saw improved profitability last year. Infobank noted there were two factors enabling the banks to keep their losses down.

First, some of the large banks had recovered from the so-called "negative spread" disease following the central bank's decision to lower interest on time deposits from January to September 1999. Second, the policy to restructure banking credits had in stages improved the quality of credits. It also noted most of the banks that posted big profit last year had low cost of fund.

In terms of balance sheets, most of the banks saw remarkable expansion of assets. The banking sector's assets grew by 29.69 percent to Rp812.13 trillion. The same also applied to the public fund which rose by 33.11 percent to Rp768.155 trillion. The banks also saw improvement in their capital. By September 1999, a total of 13 national banks had capital adequacy ratio (CAR) below 4 percent.

Infobank predicted until the middle of this year banks with low cost of fund would have the greater chance to make large profit because they would continue to speculate in Bank Indonesia's short-term promissory notes (SBI). They were also expected to extend credits to the consumer loan sector and the medium-and small-sized trade sector.