KB Bank Successfully Reduces Risky Credit Ratio Below 35 Percent

Illustration (Photo: Doc. ANTARA)

JAKARTA - KB Bank has succeeded in improving the quality of assets as seen from the Risk Credit (LAR) ratio which continues to show improvement.

The LAR ratio for the first quarter of 2024 was recorded at less than 35 percent, continuing to decline compared to the end period of 2023 which was around 40 percent and the end period of 2022 was around 50 percent.

Even at the beginning of the 2021 KB Bank transformation period or a year after KB Kookmin Bank became the controlling shareholder, the LAR KB Bank ratio had touched 65 percent.

Deputy President Director of KB Bank Robby Mondong said that the improvement in the LAR KB Bank ratio was driven by the transfer of low-quality assets worth IDR 2.87 trillion, through the Asset Back Securities (ABS) scheme, which is a continuation of the asset quality improvement program carried out by KB Bank since the transformation period in 2021.

"The achievement of this positive performance of KB Bank is increasingly making us more optimistic to be able to expand more quality credit, where this year we are targeting growth from the MSME and retail segments by making the wholesale segment an anchor for the business ecosystem," he said in a statement. kepadmedia, Tuesday 23 April.

Robby explained, based on the Bank's Business Plan, 2024 is a target for KB Bank to complete an asset quality improvement program.

In addition, this year is also the year of implementation of the digital transformation of KB Bank, driven by the latest banking system adopted from the parent company of KB Bank; KB Kookmin Bank and KB Financial Group, namely Next Generation Banking System (NGBS).

Various performance improvement efforts made by KB Bank, he continued, are expected to encourage positive growth in KB Bank in the midst of a very dynamic economic situation.

"It is still heating up the geopolitical situation in the Middle East and the inflation rate in the United States has not subsided, making the performance of the banking sector quite challenging," continued Robby.

Moreover, KB Bank targets to achieve operating profit before the positive pre-provision operating profit (PPOP) in 2024, and positive net profit in 2025.

Previously, an independent rating agency; Fitch Ratings, had maintained the national rating of KB Bank at the AAA level with a stable outlook.

The highest ranking given by the Fitch Rating is an appreciation for the various efforts of the Bank's KB in encouraging growth.

"As KB Bank's performance continues to improve, we believe we can achieve sustainable growth," concluded Robby.