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Jakarta Post

BTPN profits decline 21% in Q3 as bad loans increase

  • Yunindita Prasidya

    The Jakarta Post

Jakarta   /   Wed, October 28, 2020   /   04:05 pm
BTPN profits decline 21% in Q3 as bad loans increase Webpage of digital banking platform Jenius, operated by publicly listed Bank BTPN, is pictured in this undated photo. (JP/Muthi Kautsar)

Despite booking loan growth, publicly listed bank BTPN saw its net profits plunge during the first nine months of this year as it was forced to increase provision for rising bad loans.

The privately owned bank reported that its net profits were down by 21 percent year-on-year (yoy) to Rp 1.5 trillion (US$102.46 million) from Rp 1.95 trillion booked during the same period last year. The decline was a result of an 84 percent increase in loan-loss provision to Rp 1.95 trillion, while net interest income dropped by 2 percent to Rp 7.9 trillion.

On the other hand, the bank’s loan disbursement grew 6 percent to Rp 148.8 trillion as of September, driven by 21 percent growth in the corporate segment. Meanwhile, its gross non-performing loan (NPL) rate, which measures the amount of bad loans in relation to total lending, stood at 1.1 percent in the third quarter, higher than the 0.81 percent recorded in the same period last year.

“We are grateful that we’ve still managed to book quite good loan growth, even above the overall sector rate, in the middle of a challenging economic situation for all of us,” Bank BTPN president director Ongki Wanadjati Dana said in a press release on Tuesday.

Nationwide banking loan disbursement grew by 0.12 percent yoy in September, data from the Financial Services Authority (OJK) show, signaling weak demand as the COVID-19 pandemic slowed business activity and depressed purchasing power.

Along with weaker purchasing power, borrowers’ ability to repay their debts has also been severely constrained. The overall NPL ratio was up by 49 basis points (bps) to 3.15 percent as of September, from 2.66 percent recorded in the previous year.

BTPN is also participating in the government’s loan restructuring program as regulated under OJK Regulation No. 11/2020. By the end of September, the bank had approved the restructuring of Rp 11.6 trillion worth of loans, around 7.8 percent of the bank's total credit portfolio.

Its digital banking platform, Jenius, has become the bank’s flagship product as it digitalizes its services to capture the more digital-savvy consumer base. Its total users have increased by 37 percent yoy to 2.8 million people, with third-party funds on the platform amounting to Rp 12.2 trillion—a growth of 136 percent yoy in the third quarter.

The bank’s shares, traded on the Indonesia Stock Exchange (IDX) under the code BTPN, rallied by 0.88 percent on Tuesday against the previous trading day, while the benchmark Jakarta Composite Index (JCI) fell by 0.31 percent.

The bank’s shares had lost 29.85 percent of their value year-to-date (ytd), as of Tuesday. The finance sector, on the other hand, fell more moderately at 15.87 percent ytd while the JCI dropped by 18.59 percent.