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Indonesian banks buoyant despite sluggish economic growth
Indonesian lenders remain upbeat on profit growth next year, even though the country’s economy is showing no signs of improving.
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Money transfer: An employee moves packs of bank notes to the cash pool at Bank Mandiri in Jakarta. (The Jakarta Post/Seto Wardhana )
Indonesian lenders remain upbeat on profit growth next year, even though the country’s economy is showing no signs of improving.
Sunarso, the president director of Indonesia’s largest bank, Bank Rakyat Indonesia (BRI), estimates the lender will record double-digit growth in profits next year as it continued its efficiency drive and business transformation to improve profitability.
Based on its macroeconomic assumptions, the state-owned bank projected profit growth of 10 percent to 11 percent and loan disbursement growth of 11 percent, Sunarso said.
“We also plan to reduce nonperforming loans to 2.4 percent in 2020 from 2.94 percent of bad loans as per September,” he said in Jakarta on Wednesday during a hearing with House of Representatives Commission XI, which oversees financial affairs.
Sunarso told legislators that the bank would continue its digital transformation by further expanding its online systems in a bid to reduce operating costs and expand its loan distribution channels.
“We will conduct a business transformation by investing more in information and technology and on a cultural transformation […]; we will also focus on financing super-micro businesses soon,” he said.
In the first nine months of this year, BRI booked a net profit of Rp 24.8 trillion (US$1.75 billion), up 5.36 percent from Rp 23.5 trillion in the same period last year. During the same period, the bank’s loan disbursement reached Rp 903.14 trillion, an increase of 11.65 percent year-on-year (yoy) and beating the industry’s average 8.59 percent yoy.
