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Bank Jatim struggling to handle troubled loans
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A Bank Jatim teller serves a customer. The bank is still struggling to handle increasing non-performing loans (NPL) that soared to 4.77 percent in 2016 from 4.29 percent in 2015. (Antara/Rosa Panggabean)
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ast Java government-owned lender Bank Jatim is still struggling to handle non-performing loans (NPL) that soared to 4.77 percent in 2016 from 4.29 percent in 2015.
Bank Jatim president director R. Soeroso said commercial sector NPL rose 230 basis points (bps) to 12.77 from 9.97 percent in 2015.
Most of the bank's customers in this segment were construction firms.
"Our commercial customers had difficulties in paying their loans because their construction projects, funded by the central government and state-owned enterprises [SOEs] were halted or even canceled," Soeroso said during the bank's press conference in Jakarta on Monday.
(Read also: Bank Jatim posts double-digit profit growth for 2016)
Soeroso added that the bank had established a special team to handle the NPL and would appoint a risk director, as well as slash corporate lending from 33 percent of total loans to only 25 percent.
Small and medium enterprises (SMEs) also has a high NPL with 11.99 percent, an increase of 88 bps from 11.11 percent in 2015.
However, Soeroso said the bank would be still committed to this sector. "We believe the SME sector will be better next year following infrastructure development in East Java. Small traders will have more chances to sell their products," he said. (bbn)
