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Jakarta Post

BRI books US$1.4 billion in Q3 profit amid rising bad loans

  • Anton Hermansyah
    Anton Hermansyah

    The Jakarta Post

Jakarta   /   Tue, October 25, 2016   /  02:20 pm
BRI books US$1.4 billion in Q3 profit amid rising bad loans Bank Rakyat Indonesia (BRI) treasury director Haru Koesmahargyo (from left to right), president director Asmawi Syam and vice president Sunarso pose after a press conference on the bank’s Q3 performance in Jakarta on Oct. 25. (JP/Anton Hermansyah)

State-owned lender Bank Rakyat Indonesia (BRI) has booked Rp 18.6 trillion (US$1.43 billion) third-quarter profit, an increase of 1.8 percent compared to the same period last year, despite growing provisions for bad loans.

BRI saw its net interest income rise 16.8 percent to Rp 48.6 trillion on a year-on-year (yoy) basis, with a 25.9 percent increase in fee-based income to Rp 6.6 trillion. However, loan provision swelled by 61.4 percent to Rp 11.12 trillion, reducing net income significantly.

"We have increased the loss coverage ratio of our loans to 166.6 percent, compared to 150 percent in the second quarter, to maintain our credit quality," BRI president director Asmawi Syam said at a press conference in Jakarta on Tuesday.

While non-performing loans (NPLs) remain at a safe level of 2.2 percent, he continued, the bank is anticipating an increase in bad loans at the end of this year. The loan loss coverage ratio is projected to reach to 170 percent in its year-end financial report.

Commenting on BRI’s financial performance, Trimegah Securities analyst Angga Aditya Assaf said the bank was on the right track. "The credit market condition is still not healthy yet. Banks need to add more 'shields' to protect against bad loans at the end of the year," he said. (ags)

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