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Jakarta Post

Plunging credit demand slows state-owned banks' profit growth

  • Riska Rahman

    The Jakarta Post

Jakarta   /   Mon, January 27, 2020   /  06:05 pm
The Jakarta Post Image
An official checks bundles of banknotes at a Bank Negara Indonesia (BNI) cash center in Jakarta.(JP/Ricky Yudhistira)

State-owned banks recorded less than stellar performances in 2019 as their profits slumped due to sluggish loan growth and a new regulation that requires banks to set aside more in loan-loss provisions. Publicly listed Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI), for instance, were only able to record single-digit profit growth throughout last year. Bank Mandiri, meanwhile, was still able to record almost 10 percent profit growth, although the figure was only half what it recorded in 2018. BNI’s net profit grew just 2.5 percent year-on-year (yoy) to Rp 15.38 trillion (US$1.12 billion) in 2019. The growth was much slower than the 10.3 percent growth it recorded in 2018. BRI’s profit grew 6.15 percent yoy to Rp 34.14 trillion last year, the slowest pace the bank has experienced since 2017, while Bank Mandiri booked a profit growth of 9.86 percent yoy...