14 June 2022 (closed)
Jakarta Composite Index (7,049.88) +54.44 +0.78%
USD/IDR (14,146) -6.00 -0.04%
EUR/IDR (17,335) +57.05 +0.33%
As we are in the middle of earnings season, it is interesting to take a look at the January-June 2017 corporate earnings reports of Indonesia's listed companies. Something that stands out so far is the good earnings of banks and commodity-related companies (mining and agriculture). Of Indonesia's 15 biggest banks (in terms of assets) only four experienced a contraction in net profit. This good performance comes in times when credit growth has remained rather bleak in Indonesia. So where does banks' excellent profit growth come from?
Herwidayatmo, President Director Bank Panin, said banks' improving corporate earnings in the first half of 2017 can primarily be attributed to the implementation of cost-efficiency measures and the lower costs of reserves. This explains why Bank Panin saw its net profit rise by 25.1 percent (y/y) to IDR 1.28 trillion (approx. USD $96 million), while credit growth only rose 1.8 percent (y/y) to IDR 124.3 trillion.
Jahya Setiaatmadja, President Director of Bank Central Asia (BCA), said BCA's costs of funds have fallen considerably (by 53.3 percent), hence improving the bank's balance sheets while credit growth has remained bleak. Setiaatmadja added that demand for corporate credit remains limited as consumer purchasing power in Indonesia is rather low (hence companies are reluctant to invest in business expansion).
In contrast to the private banks, government-controlled banks see better credit growth. For example, Bank Negara Indonesia (BNI) saw credit growth expand by 15.4 percent (y/y) in H1-2017 (particularly corporate credit growth was good), while its net profit grew 49.7 percent to IDR 6.2 trillion.
Indonesian Banks' H1-2017 Net Profit:
6 months 2017
|Bank BJB||IDR 716.9 billion¹||-3.8%|
|Bank Bukopin||IDR 400.9 billion¹||-10.5%|
|Bank Central Asia
||IDR 10.1 trillion||+9.4%|
|Bank CIMB Niaga||IDR 1.1 trillion¹||+86.5%|
|Bank Danamon Indonesia||IDR 2.0 trillion||+17.6%|
||IDR 9.6 trillion||+35.6%|
|Bank Negara Indonesia||IDR 6.2 trillion||+49.8%|
|Bank OCBC NISP||IDR 1.1 trillion||+23.5%|
||IDR 1.3 trillion||+25.1%|
|Bank Rakyat Indonesia
||IDR 9.8 trillion¹||+6.9%|
|Bank Tabungan Negara
||IDR 1.27 trillion||+22.0%|
|Bank Tabungan Pensiunan Nasional||IDR 730.4 billion||-9.2%|
|Maybank Indonesia||IDR 828.6 billion||+14.6%|
|UOB Indonesia||IDR 149.2 billion¹||-36.3%|
¹ based on May 2017 earnings reports