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Sharp decline in bad debt pushes up Bank Permata’s profit
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A man walks past the logo of Bank Permata at the lender's branch office in Jakarta. (Tempo/Eko Siswono Toyudho)
B
ank Permata has seen its profit grow more than 66 percent in 2019 thanks partly to a significant decline in its nonperforming loans.
Bank Permata financial director Lea Kusumawijaya said in Jakarta on Wednesday that the lender’s net profit rose by 66.5 percent to Rp 1.5 trillion (US$109.73 million) in 2019, despite the challenging economic situation during the year.
The increase in profit was supported by a sharp decline in the provision for bad debt, as well as by a 5.6 percent increase in net interest income (NII) and a 24.3 percent rise in fee-based income, Lea said.
The bank also demonstrated continued asset quality improvement amid global and domestic economic challenges throughout 2019, as seen in a decline in the nonperforming loan (NPL) ratio to 2.8 percent in December 2019 from 4.4 percent a year earlier.
The publicly listed bank noted that the improvement of the ratio was a result of the restructuring of nonperforming loans, loan write-offs and loan settlements.
“Our efforts to maintain healthy asset quality, cost-efficient operations, a healthy NPL ratio and innovation, particularly through digitalization, have been the keys to success in achieving the bank’s 2019 revenue targets,” the bank’s president director, Ridha D. M. Wirakusumah, said in a statement.
The lender’s profitability also showed an improvement, as reflected in its net interest margin (NIM), which grew to 4.4 percent by the end of the fourth quarter of 2019 from 4.2 percent in September 2019 and from 4.1 percent in December 2018.
In its technological efforts, the bank highlighted strategic collaboration with fintech firms and notable achievements in digital banking through API Banking, PermataMobile X, PermataBank.com and its new all-digital model branch, Ridha said.
Thailand-based Bangkok Bank agreed in December 2019 to assume control of Bank Permata for around US$2.67 billion by acquiring a stake of 89.12 percent from British financial giant Standard Chartered and Indonesian diversified conglomerate PT Astra International.
Shares in Bank Permata, traded on the Indonesia Stock Exchange under the code BNLI, closed at Rp 1,215 on Wednesday, unchanged from the previous trading day. (ydp)
