Assessing the Capital Strength of Large Banks Amidst Jumbo Dividend Payouts

BANKING - JAKARTA. Several jumbo banks are disbursing jumbo dividends from the 2023 profits to shareholders. This dividend payment takes into account the increasingly strong banking capital adequacy ratio or capital adequacy ratio (CAR).

For example, BRI is distributing jumbo dividends with a ratio of 80% or as much as IDR 48.10 trillion from the total net profit of the 2023 fiscal year which is IDR 60.43 trillion. Bank Mandiri is distributing cash dividends of IDR 33.03 trillion or 60% of the total net profit of the 2023 fiscal year.

In addition, there is BTN which distributes 20% of profits for dividends or equivalent to IDR 700.19 billion. BBNI decided to distribute dividends of 50% of the total net profit of 2023 or IDR 10.45 trillion.

BCA has also distributed cash dividends worth IDR 33.28 trillion. The cash dividend reached 68.47% of the net profit in 2023.

BNI President Director Royke Tumilaar stated that the jumbo dividend distribution disbursed by BNI is in line with the bank's strong capital condition. He mentioned that BNI's CAR as of December 2023 was at the level of 22.3%, far above the minimum requirement required by the regulator but still competitive among peers and giving a positive signal for both investors and rating agencies.

"We believe that this healthy CAR condition can be maintained in the future so that the sustainability and growth of the company can be maintained," Royke told kontan.co.id, Friday (15/3).

Royke added, that they project the CAR will be maintained in the range of 20%-21%. With efforts to strengthen capital carried out organically through sustainable profit growth and growing a quality asset portfolio.

BRI President Director Sunarso also affirmed, that in the next five years, BRI bank is still free to distribute jumbo dividends. This is considering that BRI's capital is quite large. This condition is depicted from the capital ratio or CAR at 27%.

The CAR ratio of BRI is far above the capital that includes all business risks, at 17.5%. Thus, there is still flexibility in the use of BRI's CAR of about 10%, and can last for five years.

"I project that in the next five years, we will still be able to distribute 80% of the profit as dividends," said Sunarso.

Meanwhile, Bank Mandiri President Director Darmawan Junaidi stated, fundamentally, the amount of the dividend has taken into account the liquidity position and the capital structure of Bank Mandiri in supporting plans for 2024.

As of December 2023, Bank Mandiri's capital adequacy ratio was at the level of 22%, up 234 bps compared to the previous year's 19.7%.

"After the dividend distribution, the capital adequacy ratio or CAR of Bank Mandiri until the end of the year is projected at a level that is more or less the same as December 2023," said Darmawan.

BTN President Director Nixon L.P. Napitupulu also said that this dividend distribution still takes into account the capital owned by BTN. In this case, he pays attention to the tier 1 capital ratio owned.

If we look at the financial report as of December 31, 2023, BTN's tier-1 capital ratio is at the level of 17.45%, up from the previous year's 16.13%. Meanwhile, BTN's CAR ratio is at the level of 20.07%, slightly down from 2022 at 20.17%.

"For CAR, it is more than enough to expand. We keep our CAR so as not to be below 19% but if tier-1 capital is maintained in the range of 14% to 17%," he said.

Meanwhile, BCA's Executive Vice President of Corporate Communication and Social Responsibility, Hera F. Haryn, said that BCA's capital is currently in a solid position, and the allocation of capital for operational risk continues to decrease.

BCA's capital adequacy ratio was recorded at the level of 29.4% in 2023, an increase from BCA's CAR in 2022 which was at the level of 25.8%.

"We view this capital position as adequate to anticipate possible risks, as well as to support business activities and sustainable business development," she said.

Going forward, BCA hopes that the capital position will remain at an adequate level, supported by solid performance throughout 2022 and a positive outlook for national economic growth.