Cost Of Fund Increases Significantly, Bank Mega's Net Profit Depletes To 13.37 Percent In 2023

Bank Mega (Photo: Doc. Antara)

JAKARTA - PT Bank Mega Tbk (MEGA) recorded a decrease in net profit by 13.37 percent year-on-year (yoy) compared to 2022.

Deputy President Director of Bank Mega Diza Larentie said the decline was partly due to the significant increase in the cost of funds for banks (cost of funds).

Based on Bank Mega's financial report, the private bank recorded a net profit of IDR 3.51 trillion throughout 2023. This amount decreased when compared to the previous year's net profit which reached IDR 4 trillion.

"Indeed, there was a first increase in cost of funds. So if we look at it, our cost of funds is extraordinary, yes. In the past year, BI alone has increased 7 days of repo several times, of course it is in line with the Fed too," he quoted Antara as saying.

In its report, Bank Mega noted that the high benchmark interest rate of Bank Indonesia (BI) last year also had an impact on rising banking interest rates and increasing the cost of funds. According to records, the cost of funds in 2023 will increase to 4.43 percent year-to-date (ytd) from 3.05 percent ytd in 2022.

In addition to the decrease in net profit triggered in terms of increasing cost of funds, Diza said that lending was also a challenge for Bank Mega. The total credit in 2023 reached IDR 65.68 trillion, down from 2022 which amounted to IDR 69.7 trillion.

Meanwhile, the total third party funds (DPK) also decreased from IDR 102.9 trillion in 2022 to IDR 89.4 trillion at the end of 2023. Meanwhile, the composition of low-cost funds or current account saving accounts (CASA) improved in 2023 to 28.83 percent compared to the 2022 period of 26.76 percent.

Even so, according to Bank Mega, the decline in credit and DPK has no effect on credit liquidity and quality. This is reflected in the position of LDR of 74.03 percent and gross NPL of 1.57 percent.

To reduce costs of funds, Diza said that Bank Mega will focus on increasing CASA which is targeted to reach above 30 percent this year. Through various programs implemented, Bank Mega continues to encourage Savings to grow in 2024.

"We have mobile banking which provides a variety of conveniences. We also provide BI Fast services carried out in mobile banking. So we hope that through the features we add and the conveniences that we continue to provide in mobile banking, it can encourage an increase in CASA," said Diza.