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Bank Permata profit drops 60% as of Q3
The bank’s net profit dropped by 60.67 percent to Rp 429.76 billion (US$29.28 million) as of September from Rp 1.09 trillion booked during the same period last year.
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Bank Permata's staff explains ways to detect counterfeited banknotes to a customer at the bank's headquarters in Jakarta on July 30, 2015. (JP/Jerry Adiguna)
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rivately-owned Bank Permata has seen a significant drop in its net profit during the first nine months of this year as it sets aside considerable provisions to anticipate a rise in bad loans.
The bank’s net profit dropped by 60.67 percent to Rp 429.76 billion (US$29.28 million) as of September, from Rp 1.09 trillion booked during the same period last year.
Meanwhile, the bank reported that it had allocated Rp 1.86 trillion for provision expenses to cater to a potential increase in bad loans driven by the economic slowdown. During the same period last year, the bank allocated just Rp 741 billion in provisions.
“It is the result of the bank’s efforts in maintaining and booking a profit, manageable asset quality, maintaining optimal liquidity and a very strong capital position,” Bank Permata president director Ridha D. M. Wirakusumah said in a press release on Oct. 28.
The COVID-19 outbreak has disrupted business activity and weakened purchasing power, resulting in cooling demand for loans. As a result, Indonesia’s banking industry loan disbursement growth stagnated at 0.12 percent year-on-year (yoy) in September while non-performing loans (NPL) increased to 3.15 percent, Financial Services Authority (OJK) data shows.
Bank Permata’s NPL, a ratio that measures the number of bad loans to total debts, stood at 3.8 percent as of September this year, an increase of 50 basis points (bps) from last year’s figure of 3.3 percent.
“The bank is making continuous efforts to improve its NPL through restructuring bad loans, credit write-offs, NPL credit sales and growing good book credit,” the statement reads.
Following the issuance of a loan restructuring relaxation policy under Financial Services Authority Regulation (POJK) No. 11/2020, the bank reported that it had approved loan restructuring schemes for around 11.6 percent of its loan portfolio, with some restructuring processes having been concluded while others are still ongoing.
While the bank saw a decrease in loan disbursement in comparison to the same period last year, its third-party funds increased by 11.1 percent year-on-year (yoy). The bank did not disclose its loan disbursement figure.
Earlier this year, Bank Permata’s shares owned by diversified conglomerate PT Astra International and Standard Chartered Bank were acquired by Bangkok Bank for Rp 33.66 trillion, equal to 1.63 times Bank Permata’s book value. Recent developments with the authority have made way for further integration as the OJK had approved the two banks’ integration plan, which was made effective on Oct. 7.
In the integration plan, Bank Permata will merge with all of Bangkok Bank’s branches in Indonesia. The plan is targeted to be completed by the end of this year.
Bank Permata’s shares, traded on the Indonesia Stock Exchange (IDX) with the code BNLI, have gained 73.12 percent so far this year, fueled by positive sentiments toward Bangkok Bank’s acquisition. The stocks jumped 6.83 percent as of 12:40 p.m. Jakarta time on Monday while the main gauge, the Jakarta Composite Index (JCI), slipped 0.3 percent.
