JAKARTA (TheInsiderStories) – Indonesia’s large banks have disclosed their financial results for the third quarter of the year. Several State-owned Enterprise (SOEs) banks recorded strong performance, driven by sustained momentum across each Group’s banking, wealth management and insurance businesses in its key markets.
The strong performance is driven by rising credit growth and a fall in non-performing loans, which translates to less loan-loss provision.
PT Bank Mandiri Tbk (IDX:BMRI), PT Bank Negara Indonesia Tbk (IDX: BBNI) and PT Bank Tabungan Negara Tbk (IDX:BBTN) all posted a surge in net profit above 20 per cent against the same period last year. Meanwhile PT Bank Rakyat Indonesia Tbk (IDX: BBRI) recorded single digit growth – just 8.2 per cent higher than the third quarter of last year.
Bank Mandiri saw a 25.4 per cent (YoY) jump in net profit, to Rp15.1 trillion ($1.1 billion) in 9M of 2017 compared to Rp12.01 trillion reported for the same period one year earlier.
Kartika Wirjoatmodjo, President Director of Bank Mandiri, attributed the strong profit growth to the Bank’s lower non-performing loans (NPL) ratio, a 9.8 per cent (YoY) increase in loans, as well as cost efficiencies. Bank Mandiri’s NPL ratio (gross) now stands at 3.75 per cent, down from 3.81 per cent in 9M of 2016. As a result its assets grew 10.6 per cent to Rp1,078.7 trillion ($80 billion).
‘The improvement in asset quality also led to a lower loan loss provision,’ said Wirjoatmodjo on Wednesday (25/10).
Meanwhile, Bank Negara Indonesia reported a 31.6 per cent (YoY) jump in net income, to Rp10.2 trillion ($753 million) up to Q3 2017, on the back of sharply improving income from corporate clients.
The mortgage-specialist bank, Bank Tabungan Negara posted a 24 per cent (YoY) increase in net income to Rp2 trillion ($148 million) between January-September 2017.
Maryono, President Director of BBTN, said these positive results came on the back of several innovations and transformational strategies. Moreover, Indonesian authorities (government and the central bank) have been actively stimulating growth, especially in the property and banking sectors.
Micro-financing for small and medium enterprises have pushed Bank Rakyat Indonesia profit 8.2 per cent upwards, to Rp20 trillion ($1.5 billion) for the first nine months of the year.
‘In the remaining three months, we are optimistic that we can achieve the company targets set at the beginning of the year,’ BRI President Director Suprajarto said on Thursday (26/10).
BBRI’s net interest income grew by 11.9 per cent, to Rp55.1 trillion between January and September, compared with the same period in 2016. Non-interest income inched up by 11.8 per cent to Rp13.7 trillion in the same period.
Indonesia’s largest private lender, PT Bank Central Asia Tbk (IDX: BBCA), reported Rp16.8 trillion in net profit in the first 9 months of the year, for an increase of 11.3 per cent over the Rp15.1 trillion reported for the same period last year.
BBCA President Director Jahja Setiaatmadja attributed the rise in net profit to a 13.9 per cent increase in credit and 10.6 per cent YoY growth in fee-based income.
‘Good management also contributed to the success in maintaining the positive growth of profit,’ Setiaatmadja mentioned.
The bank’s outstanding credit reached Rp440 trillion as of the end of September 2017, for an increase of 13.9 per cent over a year earlier.
Although credit grew by 13.9 per cent in the first nine months, Jahja chose to be conservative in setting the target, saying he only expected 9 per cent for the remainder of the year.
Writing by Elisa Valenta, Email: email@example.com