Bank Rakyat Indonesia profit up 11% to $1.03b in H1

Loans posted double digit growth at 15.5%.

Bank Rakyat Indonesia’s profit rose 11% YoY to $1.03b (RP 14.9t) in the first half of the year on the back of strong loan growth, according to UOB Kay Hian.

The bank’s loans surged 15.5% YoY led by lending to SOE which rose 24%. Other loan segments also performed strongly like micro, consumer, small commercial and corporate loans which rose 14%, 16%, 15% and 12% respectively.

“We think the bank is pushing for higher interest revenue growth ahead of yield pressures expected in 2H18 from possibly higher interest expense. Nevertheless, higher loan growth and revenue growth should take some pressure off NIM in 2H18,” said UOB analyst Alexander Margaronis.

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Interest revenue also rose 5.4% YoY whilst interest expenses dropped 8% YoY. Non-interest fees also rose 9% YoY on the back of higher fees and commissions.

Credit cost also fell to 2.7% with coverage ratio slightly down at 192% from 195% in Q1. This was driven by overall stable asset quality and easing NPL pressures.

“Pressure from the medium commercial segment is still high with NPL at 6% although medium commercial loans account for only 3% of total loans,” Margaronis added.