Bad Credit Reserves Erode State-Owned Banks' Profits
State-owned banks' profits went on a free-fall following lower asset quality, with four banks suffered more than 20 percent decline. PT Bank Negara Indonesia Tbk (BBNI) net profit decreased by 41.6 percent in the first half of 2020 to Rp 4.46 trillion from Rp 7.63 trillion a year earlier.
BNI Finance Director Sigit Prastowo said the company's profit declined as it saw more restructuring and deteriorating asset quality due to the COVID-19 pandemic. Meanwhile, PT Bank Rakyat Indonesia Tbk (BBRI) President Director Sunarso said the company could hardly post an increased net profit by the end of the year. In the first semester, BRI was only able to book a net profit of Rp 10 trillion, as net interest income decreased due to the credit restructuring program for pandemic-hit customers.
PT Bank Mandiri Tbk (BMRI) posted Rp 10.29 trillion in net profits during the first half of 2020, lower than a year earlier, which reached Rp 13.53 trillion. Meanwhile, PT Bank Tabungan Negara Tbk (BBTN) suffered a 40.92-percent decline in net profits to Rp 768 billion in the first half of 2020 from Rp 1.3 trillion in the first half of 2019.