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PermataBank back in black after dismal 2016
Publicly listed lender PT Bank Permata returned to the black in 2017 following a significant decline in its bad loans during the year
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Publicly listed lender PT Bank Permata returned to the black in 2017 following a significant decline in its bad loans during the year.
The bank’s financial performance bounced back from a dismal 2016, with net profits after tax of Rp 748 billion (US$52.4 million).
Bank Permata recorded a loss of Rp 6.5 trillion in 2016 amid swelling costs and rising non-performing loans (NPLs), but a focus on improving loan quality put it back on track in 2017.
Total operating income increased slightly to Rp 8.6 trillion in 2017 from Rp 8.6 trillion in 2016, but the largest performance improvement was in impairment losses, which dropped by 75 percent to Rp 3.3 trillion to Rp 12.2 trillion.
“2017 was a year of consolidation for the bank as we strengthened our risk management framework, improved operational efficiency, expanded our customer base and continued to invest in new products and services,” Bank Permata’s president director Ridha Wirakusumah said in a statement recently.
“We are now on track toward profitability and sustainable growth,” he said. “We have strengthened our capital base and finished the year with a much stronger balance sheet, positioning the bank well for future growth.”
The improved loan quality is reflected in the bank’s gross and net NPL ratios of 4.6 percent and 1.7 percent, respectively, as of 31 December 2017 compared to 8.8 percent and 2.2 percent in December 2016.
Bank Permata’s NPL coverage ratio also increased to 191 percent from 122 percent in December 2016, while its loan-to-deposit ratio (LDR) grew to 88 percent from 80 percent in the same period last year.
The bank’s capital adequacy ratio (CAR) also improved to 18.1 percent compared to 15.6 percent in 2016, on the back of its improved performance and a successful Rp 3 trillion rights issue in June 2017.
Loans were 10 percent lower compared to a year ago, down to Rp 89.7 trillion from Rp 94 trillion, which Ridha said was a result of the bank’s focus on improving asset quality and the sale of NPLs in the first half.
Loan growth was also down 7 percent year-on-year, but in the fourth quarter of 2017 loans grew 5 percent from Rp 92.8 trillion in September 2017 to Rp 97.6 trillion in December 2017.
According to a statement from the bank, the positive loan growth in the fourth quarter was derived from auto loans, mortgages and SME loans, and wholesale banking.
The bank said its improved performance was also due to its efforts to create innovative products through its technology platform.
In September 2017, Bank Permata launched Indonesia’s first e-bond, allowing customers to buy debt paper through internet banking. The bank was also the first to introduce TouchID and FaceID to its mobile banking
platform.
“Our achievements in 2017 are the result of hard work and contributions from all of our dedicated employees,” Ridha said.
“We are confident the bank will continue to grow in 2018 and is well positioned to take advantage of the many opportunities in the Indonesian market as we build up our role as an agent of development for the nation and our customers,” he added. (kmt)
