Bank DKI Records Credit and Financing Growth of 14.82 Percent in the Second Quarter of 2023

Photo: Doc. Bank DKI

JAKARTA - Bank DKI continues to record positive performance amidst various challenges to the banking industry in line with rising interest rates and negative sentiment due to the banking crisis in the United States and Europe in early March 2023 to May 2023. As of June 2023, Bank DKI recorded credit and financing performance growth of 14.82 percent to IDR 50.11 trillion, from IDR 43.64 trillion in the same period in the previous year.

The growth of Bank DKI's lending and financing is better than national credit and financing growth based on Indonesian Banking Statistics (SPI) data published by the Financial Services Authority (OJK), until April 2023 which grew by 8.26 percent, and better than the average BPD credit and financing growth grew by 10.07 percent.

Main Director of Bank DKI, Fidri Arnaldy, through a written statement on Thursday 27 July, said that this positive performance was driven by year-on-year (yoy) growth in lending in all segments, with a focus on the MSME sector. Significant growth occurred in retail loans which grew by 74.46 percent to IDR 1.43 trillion in June 2023, from a position of IDR 821.54 billion in June 2022.

Micro credit also showed an impressive performance with a growth of 52.50 percent to IDR 2.98 trillion in June 2023, from a position of IDR 1.95 trillion in June 2022. In addition, consumer credit also recorded a positive growth of 14.23% to IDR 20. 94 trillion in June 2023, from a position of Rp. 18.33 trillion in June 2022.

Likewise with larger scale loans, such as medium loans, which grew 16.18 percent to IDR 1.68 trillion in June 2023, from IDR 1.45 trillion in June 2022. Meanwhile, the commercial credit segment grew 2.03% to IDR 16. 45 trillion in June 2023, from a position of Rp. 16.13 trillion in June 2022, in line with Bank DKI's selective commercial lending strategy.

Syndicated loans also recorded significant growth, namely growing 33.48 percent to IDR 6.62 trillion in June 2023, from IDR 4.96 trillion in June 2022. The distribution of financing for the sharia segment also grew 10.19 percent to IDR 7.82 trillion in June 2023, from the previous IDR 7.09 trillion in June 2022.

Along with the increase in lending and financing, this has contributed to an increase in Bank DKI assets by 12.08% to IDR 82.00 trillion in June 2023, from a position of IDR 73.17 trillion in June 2022.

Furthermore, Fidri said that in the credit expansion strategy, the Company prioritizes effective risk management, regulation of loan portfolios that are oriented towards the MSME segment and strict supervision to ensure optimal asset quality. The Gross Non-Performing Loan (NPL) ratio has improved to 1.90 percent in the second quarter of 2023 from the previous 2.26 percent in the second quarter of 2022, indicating that Bank DKI's credit quality is getting healthier.

In addition, Bank DKI also mitigates potential risks in line with credit growth by maintaining a Coverage Ratio of 219.16 percent.

"Facing challenging economic conditions, Bank DKI continues to strive to adapt strategies and look for new opportunities, especially in stable and potential sectors and consistently accelerate digitalization, to create long-term value for all stakeholders," said Fidri.

Anticipate Trends in Interest Rates and Tighten Liquidity

Director of Finance & Strategy of Bank DKI, Romy Wijayanto explained that Third Party Funds (DPK) grew by 9.91 percent to IDR 66.75 trillion in June 2023, from IDR 60.73 trillion in June 2022.

DPK growth was dominated by the growth of low-cost funds (CASA) in Q2 2023, with Current Accounts growing 5.03 percent to IDR 15.20 trillion in June 2023, from the previous IDR 14.47 trillion in June 2022, while savings grew 10.75 percent to IDR 10, 83 trillion, from the previous IDR 9.78 trillion in June 2022.

Due to the achieved credit and DPK growth, the Loan to Deposit Ratio (LDR) rose to a level of 75.06 percent in June 2023, compared to the previous 71.86 percent in June 2022. Meanwhile, other ratios continued to grow positively and were well maintained compared to the previous period. Q2-2022. ROE is maintained at 9.86 percent, ROA is 1.56 percent and Operating Expense to Operating Income (BOPO) is stable at 78.39 percent.

As for Bank DKI's interest income until June 2023, it grew by 22.47 percent to IDR 2.64 trillion, from IDR 2.16 trillion in the same period the previous year. However, on the other hand, along with the trend of increasing banking interest rates, Bank DKI's interest expenses also increased by 76.82 percent to IDR 1.29 trillion in June 2023, from IDR 728.03 billion in June 2022.

"The trend of rising interest rates and tightening liquidity carried out by the Central Bank is anticipated by Bank DKI with a liquidity management strategy including maintaining credit quality and yields at a healthy level to offset the cost of funds," Romy explained.

Regarding these various achievements, as of June 2023 the business performance of Bank DKI is still on a positive growth trend by posting a net profit of IDR 477.88 billion, growing 4.72 percent compared to the profit of the first quarter of 2023 of IDR 233.20 billion, while net profit in the June period 2022 which was recorded at IDR 504.89 billion.