Bank Rakyat Indonesia (BRI), the most profitable lender, will exceed all growth targets of third party funds (DPK), loans and net profit this year.

BRI plans on jacking up its annual loan growth target from 12 to 14 percent at present. Data from BRI shows its outstanding loans stood at Rp 658.09 trillion as of May, already equal to more than 90 percent of its current target.

The original target for its customer deposits was set at the same range, 12 to 14 percent, and the May result shows that BRI again exceeded 90 percent of the goal.

BRI president director Suprajarto declined to go into detail regarding the targets, saying only that “the increases will be slim.”

BRI attributed its optimism to many business potentials available, especially after international credit rating agency S&P Global Ratings (S&P) granted the country an investment grade in May.

“The upgrade will boost investment growth and we hope real sectors will grow faster, in line with the government’s expectation,” Suprajarto said.

The lender, which specializes in micro loans and small and medium enterprises (SME) loans, believes the government’s rapid infrastructure development will drive growth in the real sector.

Indonesia projects to see its economy grow by 5.1 percent this year and between 5.4 percent and 6.1 percent next year on the back of accelerating infrastructure developments and an improving investment climate.

It registered growth of 5.01 percent in the first quarter, higher than 4.92 percent recorded in the same period in 2016.

BRI corporate secretary Hari Siaga said the bank would open up new markets, instead of relying on existing ones, citing as an example Teras BRI, its “floating banking service” on a ship.

However, BRI may find it challenging to meet new profit targets, considering it reaped less than 40 percent of its original target in May.

It initially eyed growth of 3 to 5 percent, which would bring its full-year profit to between Rp 26.52 trillion and Rp 27.04 trillion. However, its profit stood at Rp 9.77 trillion as of May.

Meanwhile, Bank Mandiri said it will see several changes in its loan composition.

“The corporate and retail segment will grow higher,” Bank Mandiri president director Kartika “Tiko” Wirjoatmodjo said.

The lender previously expected commercial and SMEs segments to expand faster. Nevertheless, corporate and retail segments still offered abundant business potentials, Tiko said.

In the corporate segment, the top five sectors are electricity, manufacturing in food and beverage, trade in retail, roads and bridges, and trade in exports.

Mandiri eyes an annual rise of 11 to 13 percent to Rp 734.82 trillion in its outstanding loans in 2017 and booked 80 percent of the target as of May.

State-owned Bank Negara Indonesia (BNI) and private-owned Bank Central Asia (BCA) said they will not revise their business plans as recent results were expected.

In a report, Moody’s Investors Service changes its outlook on Indonesia’s banking system to positive from stable, reflecting its view that banks will see improvements in their operating environment, asset quality, as well as the capacity by the government to extend support when necessary, its official statement reads.

“Indonesian banks will benefit from an improving operating environment in the coming 12 to 18 months as economic growth picks up due to supporting macroeconomic policies and a stronger market for the country’s key commodities,” Moody’s vice president and senior credit officer Srikanth Vadlamani said.

“Our baseline scenario assumes real gross domestic product [GDP] growth in Indonesia of 5.2 percent in 2017 and 5.3 percent in 2018, […].” (rdi)

Popular

To my horror, it’s just a movie!

RI, Australia strengthen partnership on taxing crypto assets

Pentagon chief congratulates Prabowo on being elected President