EKBIS.CO, JAKARTA -- Amid the dynamics of global economic and geopolitical conditions full of challenges, PT Bank Rakyat Indonesia (Persero) Tbk (BRI) was able to post positive profit growth, where by the end of the first quarter 2024 BRI consolidated profit of Rp 15.98 trillion. This was stated by the President Director of BRI Sunarso during the press conference BRI Financial Performance First Quarter 2024 in Jakarta on Thursday (25/4/2024).
Sunarso said the company will continue to closely monitor the development of global economic conditions and at the same time will focus more on domestic challenges. “Global economic conditions are currently experiencing high uncertainty, as the Fed is expected to keep its benchmark interest rate high for longer to dampen the pace of inflation in the United States. On the other hand, geopolitical tensions in the Middle East are heating up causing investors to move their assets to “safe havens” thereby depressing the exchange rate of the Rupiah against the Dollar and the Stock Price Index (IHSG),” Sunarso explained.
Nonetheless, Sunarso remains optimistic with BRI's performance going forward and will focus more on domestic challenges. “The Company sees current national economic conditions as having resilience to global economic stability and BRI is committed to supporting government program programs that support domestic economic growth,” Sunarso said.
One form of BRI's commitment to supporting national economic growth is to promote job creation, especially in the SME segment through the provision of qualified credit.
Until the end of March 2024, BRI managed to distribute credit amounting to Rp 1,308.65 trillion or double digit growth of 10.89 percent year on year. Of these loans, 83.25 percent of them or Rp 1,089.41 trillion is a loan portfolio for the MSME segment. The issuance of loans that grew in double digits had an impact on the increasing assets of the company, where BRI's assets amounted to Rp 1,989.07 trillion or grew 9.11 percent yoy.
“BRI believes that the company's continued empowerment to the MSME segment has an impact on the sustainability of the national economy, given that SMEs play a role in about 97 percent of job creation in Indonesia and contribute to GDP in the range of 61 percent,” Sunarso explained.
When detailed, all BRI loan segments recorded positive growth, micro segment recorded growth of 10.51 percent yoy to Rp 622.61 trillion, consumer segment grew 11.62 percent yoy to Rp193.96 trillion, small and medium segment grew 8.06 percent yoy to Rp 272.85 trillion and corporate segment grew 15.10 percent yoy to Rp 219.24 trillion.
Although it is able to encourage double digit growth in credit distribution, in fact, the Company is still able to maintain the quality of the credit it provides. Until the end of Q1 2024, the BRI controlled Non Performing Loan (NPL) ratio was 3.11 percent with an improved Loan at Risk (LAR) ratio, from 16.39 percent at the end of Q1 2023 to 12.70 percent at the end of Q1 2024.
“As the bank with the largest portfolio in the MSME segment, the NPL in the three percent range is a clear proof that BRI is able to maintain its credit quality well through the application of prudent risk management principles,” Sunarso said.
In terms of liabilities, the company was able to raise Third Party Funds (DPK) of Rp 1,416.21 trillion or grow 12.80 percent yoy until the end of March 2024. Low-cost funds (CASA or Current Account Savings Account) still dominate the deposit portfolio with 7.80 per cent growth on a yoy basis. CASA's growth is inseparable from BRI's ambition to transform its liabilities through strengthening its funding base with a focus on low-cost funding from CASA that is more stable and sustainable.
Amid the tight liquidity of national banks as a result of the era of high interest rates, BRI managed to keep the liquidity ratio at an adequate level, with the Bank's LDR (Loan to Deposit Ratio) at the end of March 2024 at 83.28 percent. From the capital side, BRI was also able to maintain a strong capital ratio with a CAR (Capital Adequacy Ratio) of 23.97 percent. With such adequate liquidity and capital conditions, the company still has room to grow better.
Meanwhile, non-interest/fee based income (FBI) which grew 6.92 percent yoy was one of the driving factors for BRI's profit growth.
One of the pillars of BRI's Fee Based Income performance is not apart from the contribution of BRIMo superapps, where by the end of March 2024, BRIMo had 33.5 million users or grew 30.3 percent YoY. “In 3 months, BriMo managed to process 969 million financial transactions with transaction volume reaching Rp 1.251 trillion or growing 41.8 percent yoy,” Sunarso said.
The presence of Agenbrilink also contributes greatly to BRI's Fee Based Income performance. During January-March 2024, the agency managed to register 285 million financial transactions with a transaction volume of IDR 370 trillion and contributed Fee Based Income to BRI worth Rp 395 billion. By the end of March 2024, BRI alone had 796,836 agents spread across 61,122 villages throughout Indonesia.
From the operational side, the company is able to continuously improve its operational efficiency. This is reflected by the ever-improving Cost to Income Ratio (CIR). The BRI CIR at the end of March 2024 recorded 37.43 percent or better than the CIR at the end of March 2023 which was 41.83 percent. “The decline in CIR shows that BRI manages costs effectively and efficiently in generating revenue,” he added.
“With positive performance in the first three months of 2024, BRI is optimistic that BRI can continue to grow sustainably by promoting prudential banking principles, as well as good risk management amid the dynamics of global economic and geopolitical conditions that need to be watched. BRI will focus more on responding to domestic challenges, especially through empowering SMEs,” concluded Sunarso.
