Increase in New Loan Disbursement Drives Growth in KB Bukopin's Interest Income in Q1 2023
By : Nata Kesuma | Tuesday, May 09 2023 - 13:52 IWST
Bank KB Bukopin (BBKP)
INDUSTRY.co.id - Jakarta, - Bank KB Bukopin (BBKP), succeeded in posting an increase in interest income by 23.5% YoY to IDR 1.1 trillion in the first quarter of this year.
The growth in interest income was driven by new loan disbursement of IDR 2.0 trillion, an increase of 38.3 % compared to the same period the previous year.
Meanwhile, total credit in this period was at IDR 45.8 trillion, down 13.2% YoY. This decrease in total loans is part of KB Bukopin’s strategy to improve asset quality by settle low quality asset.
KB Bukopin, which is in the process with KB Financial Group-Korea to turn its business around for the better, has succeeded in making substantial progress where the number of gross non-performing loans (NPL) fell by 48.6% YoY, from IDR 6 .1 trillion in the first quarter of 2022 to IDR 3.2 trillion in the first quarter of 2023. The Gross NPL Ratio was at 7.0%, an improvement compared to the same period the previous year which was at 11.8%.
"Bank KB Bukopin's efforts to improve asset quality have shown results, which among others can be seen from the number of non-performing loans which dropped drastically in the first quarter of 2023. This improvement in asset quality was achieved through organic methods such as collection, cessie, and combined with inorganic scheme through bulk sales, and write off.” said Deputy President Director of PT Bank KB Bukopin Tbk, Robby Mondong.
Furthermore, the improvement in the quality of KB Bukopin's assets can also be seen in the LAR (loan at risk) rate which decreased from 64.4% in the first quarter of 2022 to 50.3% in the first quarter of 2023.
Meanwhile, total deposits were at IDR 46.5 trillion, down 5.4% YoY. This decrease in savings is a consequence of Bukopin's KB strategy to change the composition of the managed funds, so that in the future it can focus on increasing low-cost funds obtained from savings and current accounts or CASA (Current Account Saving Account) to manage the cost of funds (Cost of Fund).
From the current CASA ratio which stands at 20.6%, KB Bukopin targets the CASA ratio to increase to close to 25% by the end of 2023.
KB Bukopin intends to maintain the loan to deposit ratio (LDR) at the current level, namely at 98.5%, and manage its funds efficiently to avoid excessive idle funds. Meanwhile, the NIM (net of interest margin) was recorded at 0.8%, decrease from 1.7% in the same period the previous year due to trend of reference interest rate increase.