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BANKING - JAKARTA. As the season for the release of banking financial performance reports for the first quarter of 2024 approaches, it appears that there will be a decline in performance due to the persistently high benchmark interest rate.
Indeed, Bank Indonesia has raised it to a level of 6.25% as of April 24, 2024. This projected decline in performance is reflected in the financial performance reports of 11 major banks in the country as of February 2024.
Take, for example, PT Bank Rakyat Indonesia Tbk (BBRI). As of February 2024, BRI recorded a net profit decrease of 3.51% year-on-year, to IDR 8 trillion. In the same period in 2022, BRI recorded a net profit of IDR 8.35 trillion.
In addition to BRI, other state-owned banks that recorded a decline in net profit performance include PT Bank Mandiri Tbk (BMRI) and PT Bank Negara Indonesia Tbk (BBNI). The net profits of these two banks decreased by 2.98% and 5.90% respectively as of February 2024 (see table).
Source: Financial Report
Meanwhile, state-owned banks that still recorded net profit growth include PT Bank Tabungan Negara Tbk (BBTN) and PT Bank Syariah Indonesia Tbk (BRIS), which grew by 4.40% and 10.25% respectively as of February 2024.
On the other hand, national private banks such as PT Bank Central Asia Tbk (BBCA) were able to maintain net profit performance growth in the first quarter of 2024, growing by 11.70% to IDR 12.9 trillion. In line with this, third-party funds (DPK) also grew positively.
Meanwhile, looking at the financial performance position of other private banks as of February 2024, the national private bank that recorded a dazzling net profit performance is PT Bank Pan Indonesia Tbk (PNBN) with net profit growth reaching 71.52%, followed by PT Bank Permata Tbk (BNLI) with net profit growth of 58.83%, and PT Bank OCBC NISP Tbk (NISP) whose profit grew by 33.73%.
On the other hand, the decline in net profit performance of national private banks is shown by PT Bank CIMB Niaga Tbk (BNGA) and PT Bank Danamon Indonesia Tbk (BDMN), which each fell by 4.69% and 13.81%. However, credit and DPK still appear to be growing.
CIMB Niaga's Consumer Banking Director, Noviady Wahyudi, said that they are still optimistic that credit can grow in the first quarter of 2024.
"Looking at the potential for a decrease in the BI Rate will be influenced by geopolitics, especially with the rising world oil prices. But CIMB Niaga continues to strive to push credit, targeting segments that continue to grow well, especially consumer banking," he told Kontan on Wednesday (24/4).
Furthermore, the man affectionately known as Dede said that automotive segment credit and Home Ownership Credit (KPR) will be the pillars of credit growth at the beginning of this year.
"The projection can still grow double digits for the KPR and KKB segments, our projection for personal loans is the same, growing double digits, because the need is still high," Dede explained.
On the other hand, even though the BI Rate continues to rise, Dede said that home and car sales have been affected. This is also what made CIMB Niaga raise its SBDK on all credit segments. Although he did say that the increase in the SBDK did not immediately raise the credit interest rate.
"We still hope that the performance of the first quarter will rise from the previous year, even though the interest rate is still high, we also continue to provide convenience to customers through KPR Xtra Benefits," said Dede.
Meanwhile, BCA President Director Jahja Setiaatmadja also mentioned that a decrease in The Fed's interest rate is likely to occur in December, or could even be more extreme and only be lowered next year.
"If you look at the higher for longer, I believe that at least this year, but not in the short term in May-June they will not lower the interest rate. December or next year will also look at the conditions over time whether The Fed is confident about it," he said recently.
Just so you know, if the trend of high interest rates continues to persist or even continues to rise, this will have an impact on bank credit, where banks will be more cautious in disbursing their credit, when customers will also be increasingly burdened with rising credit interest.
As a result, credit growth could decline in performance because people postpone applying for new credit.
