KB Bank Records 48 Percent Credit Growth In Semseter I 2024

Photo: Doc. Antara

JAKARTA - PT Bank KB Bukopin Tbk or KB Bank recorded a new credit portfolio growth throughout the first half of this year of 48 percent year on year/YoY.

This growth, the company noted, was driven by credit expansion from the MSME and retail segments which grew 26 percent YoY, by utilizing support from the corporate segment or wholesale business which grew 72 percent YoY including the Korean Link Business.

"Positive achievements during the first half of 2024 provide important capital for management and employees of KB Bank to continue to encourage growth and achieve the company's target in accordance with business plan," Deputy President Director of KB Bank Robby Mondong in a statement in Jakarta, quoted from Antara, Thursday, August 1.

Closing the first quarter of this year, the company succeeded in transferring low-quality assets worth IDR 2.87 trillion through the asset backed securities (ABS) scheme.

This strategic step, noted the company, reduces the ratio of low-quality loans or loan at risk (LAR) from around 40 percent at the end of 2023 to less than 35 percent at the end of the first quarter of 2024.

Then, LAR was recorded to continue to decline to below 27 percent by the end of the first semester of 2024. The company targets the LAR ratio to be maintained at around 20 percent by the end of 2024.

In the second quarter of 2024, the company received a funding facility of 300 million US dollars from the Korea Development Bank (KDB) with the support of the parent company KB Kookmin Bank Co., Ltd. through a standby letter of credit (SBLC) guarantee.

According to the company, the facility strengthens the funding structure of KB Bank so as to allow credit expansion in the midst of a dynamic market situation.

Thanks to these achievements, the independent rating agency Fitch Ratings maintained the KB Bank's national ranking at the highest level of AA with a stable outlook. Fitch Ratings also gave the international ranking BB, equivalent to Indonesia's sovereign credit rating.

In accordance with the business plan, the company targets to achieve operational profit before the positive pre-provision operating profit (PPOP) burden by 2024 and net profit by 2025.

As for the first six months of this year, the company has recorded a positive cumulative PPP at the end of April 2024 and continues until June 2024.

The Company said that it is currently preparing an annual mid-Financial Report which is being audited as a strategic effort to plan future growth measures.

"We are optimistic that with the continued improvement in the fundamentals of KB Bank, the company can achieve positive growth by the end of 2024 and conduct a turnaround by 2025," said Robby.

KB Bank was previously known as the Bank Bukopin brand. The company officially changed its brand name and logo to KB Bank in March 2024. This change, the company noted, complements the bank's transformation journey since it became part of the KB Financial Group (KBFG), the largest financial institution in South Korea, in 2020.