Jakarta. State-controlled lenders Bank Rakyat Indonesia, or BRI, and Bank Mandiri, two of the country's largest lenders by assets, have reported net income of over $1.2 billion each last year, as the leaders grappled with the impact of the Covid-19 pandemic.
BRI's consolidated net income fell to Rp 18.7 trillion ($1.33 billion) in 2020, down 46 percent from Rp 34.4 trillion in 2019, the Jakarta-based lender said in a virtual press conference on Friday.
"Last year's net income was down compared to the year-earlier because we had to set aside [funds] for provision, which is quite large," Sunarso, BRI's president director, said.
"There was a month that we did not see any profit at all last year because we had to restructure the loans," he said.
Indonesian lenders must keep a certain amount of provisions to cover the bad debts should their debtors fail to pay back the debts.
BRI's non-performing loans rose 19 basis points to 2.99 percent of the total loans over the period, Sunarso said.
Sunarso said the bad loan-level was "quite safe" for BRI as the lender's provision was more than double the bad loans.
BRI also reported that it was still able to book an increase in loans last year, up 3.9 percent to Rp 938 trillion from Rp 903 trillion a year earlier. The third-party funds, including saving and time deposits account, grew 9.8 percent to Rp 1,121 trillion from Rp 1,021 trillion.
The growing loans helped boost BRI's consolidated asset to Rp 1,512 trillion last year, up 0.8 percent compared to Rp 1,500 trillion a year earlier and cementing its position as Indonesia's largest lender by assets.
Mandiri announced on Thursday that its net income had contracted 38 percent to Rp 17.1 trillion last year from Rp Rp 27.4 trillion in 2019.
Darmawan Junaidi, Mandiri's president director, said the Covid-19 pandemic has eroded business confidence and undermined Mandiri's customers' performance.
The lender's loan distribution decreased 1.6 percent to Rp 893 trillion from Rp 908 trillion. Loans to retail customers fell 4.8 percent to Rp 263 trillion from Rp 276 trillion, while the wholesale loan segment saw disbursement dropped 3 percent to 501 trillion from Rp 516 trillion.
Third-party funds at Mandiri increased 12 percent to Rp 1,047 trillion from Rp 933 trillion.
The decline in the company's profit was also due to a 4.9 percent decrease in net interest income to Rp 56.5 trillion, from Rp Rp 59.4 trillion.
Stocks Take Beating
BRI and Mandiri stocks fell sharply on Friday after the lenders announced their 2020 financial reports.
BRI shares fell 4.2 percent to trade at Rp 4.280 apiece in the first trading session at Indonesia Stock Exchange on Friday, trailing the benchmark index that was also down by 1.6 percent. That was BRI's lowest share price since Jan 7.
Mandiri's share was 6.4 percent lower, being traded at Rp 6,600 apiece, also its lowest level in three weeks.