Good News From Bank Jago, Owned By Conglomerates Patrick Walujo And Jerry Ng, They Successfully Raised A Profit Of IDR 14 Billion After 6 Years Of Loss

Illustration. (Photo: Doc. Antara)

JAKARTA - PT Bank Jago Tbk (ARTO) finally turned a profit by printing a net profit of IDR 14 billion in the third quarter of 2021. Previously, the bank, which is now owned by conglomerates Jerry Ng and Patrick Walujo, recorded losses in the last six years.

Bank Jago President Director Kharim Siregar said this achievement was supported by solid credit growth, the ratio of non-performing loans (NPL) at a very low level, and efficiency in the cost of funds thanks to an increase in low-cost funds (current account saving account / CASA).

In detail, credit distribution until the end of September 2021 reached IDR 3.73 trillion, a 502 percent jump from the same period last year (year on year/yoy). Credit growth mainly occurred in the third quarter with an increase of IDR 1.56 trillion from the previous quarter's position (qtq).

"The percentage increase looks high because we started from a low baseline. But we see the consistent business progress from time to time. We will maintain this momentum by continuing to expand collaboration and integration with the digital ecosystem," said Kharim in a written statement, quoted Friday 22 October.

Currently, the Jago application has been integrated with the online mutual fund application Bibit.Id and the Gojek super app. This integration enables consumers to access financial products and services seamlessly, easily, quickly, and safely.

The Kantong Jago feature that is connected to the Bibit and Gojek applications also makes financial management more disciplined, innovative, and collaborative. In addition to collaborating with Bibit and Gojek, Jago also collaborates with a number of fintech lending, multi-finance, and other digital-based financial institutions.

This pattern of financing cooperation (partnership lending) enables Jago to be expansive but with more controlled risk management. This is reflected in the ratio of non-performing loans (NPL) which is at the level of 0.6 percent.

"This achievement confirms that our business model is right. The implementation of the concept of collaboration with the digital ecosystem in serving customers has proven to make us grow inorganically, effectively, and quickly," added Kharim.

Credit growth of 502 percent had an impact on interest income which increased 478 percent to IDR 355 billion. Meanwhile, interest expense only rose 104 percent to IDR 38 billion. This resulted in a net interest income of IDR 318 billion, or grew 640 percent.

Net interest margin (NIM) is now at 6.1 percent, higher than the same period last year of 4.4 percent. The ability to reduce interest expenses cannot be separated from Jago's efforts to increase the composition of low-cost funds.

Until the end of September 2021, total third-party funds reached IDR 2.54 trillion, growing 564 percent. Of this amount, low-cost funds or CASA amounted to IDR 985 billion, an increase of 1.031 percent. Meanwhile, deposits worth IDR 1.6 trillion, an increase of 427 percent.

Kharim said that currently, the proportion of CASA continues to improve. As a comparison, the CASA portion in September 2021 reached 38.72 percent, much higher than the same position last year of 22.74 percent, or the position at the end of June of 30.21 percent.

During the same period, the portion of deposits to TPF has shrunk from 77.26 percent to 69.79 percent and is now 61.3 percent. “This growing portion of CASA affects the cost of funds structure so that it has a positive impact on margin gains. This increase in low-cost funds also shows a better level of public acceptance of the Jago application," he said.

Aggressive credit growth, a low NPL ratio, and the ability to improve the cost of funds structure had a positive impact on net profit after tax (NPAT) of IDR 14 billion. This achievement in the third quarter of 2021 also breaks the chain of losses that has entangled the company for the last 6 years.

"Although profit for the year is still negative, we are still grateful for this achievement. We are optimistic that our performance in the future will continue to improve and Jago will become a digital bank that is profitable and able to grow sustainably," said Kharim.

Meanwhile, Jago's assets reached IDR 11 trillion as of the end of September 2021, growing 536 percent. The capital reached IDR 8 trillion, very solid to support Jago's expansion and business plans going forward.