JAKARTA PT Bank Rakyat Indonesia Tbk. (BRI) is optimistic that it can maintain positive performance and sustainable growth in 2023 amid economic uncertainty and the threat of a global recession.
BRI President Director Sunarso said that in order to achieve this target, the company has prepared at least four scenarios which are risk mitigation and strategic response.
The first scenario is that if the economy recovers but inflation increases and the quality of loans worsens, then what is taken accelerates the process of writing-offs to obtain a higher recovery rate. Then maintain a high coverage ratio.
It can be understood that the average bank is still piling up reserves to anticipate deteriorating in the quality of its assets. And then we spare it adequately so that the bearings won't be hard landing, something like that. So the cushions are smooth to anticipate worsening," he said in a press statement, Sunday, January 22.
According to Sunarso, his party chose to grow selectively and carry out an enhanced credit risk model. With the Loan Portfolio Guideline (LPG) which is regulated moderately. Then intensively monitoring of loan quality is carried out.
Second, if the economy begins to recover with controlled inflation and credit quality improves, it speeds up the write-off process to increase the recovery rate and then reduce the coverage ratio.
Then enhancement the risk-based pricing model to increase product competitiveness and make Loan Portfolio Guideline looser as a guideline for more aggressive growth strategies.
The third is the stagnant economy, rising inflation, with the quality of loans deteriorating or the worst scenario.
"We will take a strategic response to limited growth, with a very strict Loan Portfolio Guideline arrangement. BRI will maintain coverage ratios at higher levels and carry out intensive monitoring of credit quality, conducting periodic and continuous simulations and stress-testing," he said.
Fourth, if the economy remains stagnant but the inflation is controlled and the quality of the loan improves.
The strategic response of BRI is to grow selectively, Loan Portfolio Guideline is regulated at a moderate level by maintaining a coverage ratio that remains high in case of worsening. Then monitor credit quality intensively by periodic and continuous simulations and stress-tests. That's the most important thing," explained Sunarso.
To note, the World Bank in its report entitled Is a Global Recession Imminent? predicts the possibility of a global economic recession in 2023. President Joko Widodo even mentioned that if it was like a country in the world, it was almost certain to experience a recession.
Meanwhile, Indonesia itself is classified as a country that avoids recession with the opportunity of economic worsening at only 3 percent.
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