Jakarta. Bank Permata, a joint venture between Indonesian conglomerate Astra International and British multinational Standard Chartered Bank, has returned to the black following efforts to restructure bad debt.

Permata booked a Rp 453 billion ($34 million) profit in the first three months of this year, compared to a Rp 376 billion loss in the same period a year ago, the lender said in a statement on Monday (17/04).

"We continue to put in place a plan that will enable us to return to a stronger performance this year," Permata president director Ridha D.M. Wirakusumah said in the statement.

The lender has been selling some of its bad loans to third parties and restructuring others, resulting in its nonperforming loan ratio dropping to 6.4 percent by the end of March, from 8.8 percent at the end of December.

This has reduced loan impairment costs by more than half to Rp 670 billion in the first quarter, from Rp 1.5 trillion a year ago.

Still, Permata's efforts to restructure its debt undermine the lender's outstanding loans, which have shrunk 22 percent to Rp 95.4 trillion. That also lowers the lender's net interest margin to 3.5 percent, compared with 3.9 percent at the end March last year.

Fortunately, fee-based income was up 11 percent at Rp 2.4 trillion, compensating for the drop in net interest income, Ridha said.

Permata's capital ratio was 17 percent as of the end of March this year, compared with 15.1 percent a year ago, well above the regulatory minimum of 8 percent.

The lender expects to raise Rp 3 trillion from a rights issue by the end of June, on top of its Rp 5.5 trillion rights issue in June 2016, which would further strengthen the lender's capital, its president director said.

"We are confident the bank will return to a progressively stronger performance in 2017 as we build up our role as an agent of development for our customers and clients," Ridha said.