HarianLampung.co.id – KB Bank’s Transformation Success: Loan at Risk Ratio Continues to Decrease
Jakarta – Over the past three years, KB Bank has undergone a massive transformation. This transformation is also supported by KB Financial Group (KBFG), which is now the parent company of KB Bank. The transformation has yielded quite positive results.
In the first three months of this year, KB Bank managed to record an improvement in the loan at risk (LAR) ratio, which continues to decrease, with a achievement of less than 35%. The LAR continues to decline compared to the end of 2023 which was around 40% and the end of 2022 at around 50%.
At the beginning of the transformation period of KB Bank in 2021, or a year after KB Kookmin Bank became the controlling shareholder, KB Bank’s LAR ratio once reached 65%. KBFG through KB Kookmin Bank became the controlling shareholder of KB Bank in 2020. Recorded, as of January 31, 2024, Kookmin Bank holds 67% of BBKP shares.
“The positive performance achievement of KB Bank increasingly makes us more optimistic to be able to expand credit with better quality, where this year we target growth from the MSME and retail segments by making the wholesale segment as an anchor for the business ecosystem,” said Deputy Chief Executive Officer of KB Bank, Robby Mondong.
BBKP Stocks Worth Collecting
The price of PT Bank KB Bukopin Tbk (BBKP) shares strengthened by 6 percent or 3 points to Rp53 in the first trading session on Tuesday (4/6/2024) at 10:15 WIB. Although strengthening weekly performance, BBKP shares are still in a negative position of 14.52 percent on a point-to-point basis, seen from a broader perspective throughout 2024, BBKP shares have even accumulated a depreciation of 33.75 percent.
Do not be surprised, seen from the daily chart, the bearish trend in BBKP shares has been confirmed since May 22, 2024, through the crossing of MA5 and MA21 at the level of Rp64.
Reza Priyambada, Investment Consultant at PT Reliance Sekuritas Indonesia Tbk, stated that the movement of BBKP shares at this time has not fully reflected the improving sentiment and fundamentals.
“Regarding BBKP’s performance, they are still in the process of restructuring their performance. Adjustment of credit disbursement, interest burden, collectability of credit receivables, and other things. Related to asset quality improvement and other performance are still in progress. So in my opinion, it is reasonable where the financial statements have not yet provided fantastic results,” he said.
However, from the perspective of increasing interest income and improving credit risk quality, it has begun to improve. This means that the process is still ongoing. Even if it still records a loss, it is only a calculation figure.
However, this is still a management PR to be able to improve in the future. The news of the investment grade rating from Fitch certainly has taken into account various parameters and the prospects of BBKP in the future under KB Bank.
The losses that occur due to the still high interest burden are a management PR to be improved. However, a number of improvements have also been made by management. Among them, new credit growth of Rp1.1 trillion or equivalent to 114.3% to Rp2 trillion in the first quarter of 2024.
Then, the decrease in the loan at risk ratio to below 35% at the end of the first quarter of 2024 through a series of low-quality asset transfer initiatives, with the Asset Back Securities (ABS) scheme. As well as partnerships with several parties to expand service coverage.
“Basically, BBKP’s fundamental performance is positive, as evidenced by the improved LAR ratio in the first quarter of 2024. So the stock prospects are still attractive,” he said.
BBKP continues to strive to improve the company’s fundamentals. This can be seen from the Loan at Risk (LAR) ratio of BBKP which continues to show improvement. This positive progress is not unrelated to the various strategic steps taken by BBKP management to improve asset quality and increase operational efficiency.
With the continued improvement in performance, BBKP is expected to continue to strengthen its fundamentals and provide sustainable added value for shareholders and other stakeholders.
KB Bank itself targets to achieve positive pre-provision operating profit (PPOP) in 2024, and positive net income in 2025.
Previously, the independent rating agency Fitch Ratings has maintained KB Bank’s national rating at ‘AAA’ with a stable outlook. The highest rating given by Fitch Rating is an appreciation of the various efforts of KB Bank in driving growth.
“With the continued improvement in KB Bank’s performance, we believe we can achieve sustainable growth,” said Robby.