Banking - Banks continue to strive to reduce the bad credit ratio

Banking - Banks continue to strive to reduce the bad credit ratio Subsidized Home Ownership Loans (KPR) in the banking industry are experiencing a worsening ratio of non-performing loans (NPL) or bad credit. This can be seen from the latest data from Bank Indonesia (BI), which recorded an increase in the subsidized KPR NPL ratio to 3.65% as of April 2024, up from the previous position of 3.36% in April 2023. The NPL ratio for bad loans also increased from the position in the first quarter of 2024, which was 3.58% as of March 2024. For information, subsidized type KPR has a building area in the range of 21 to 36 square meters. On the other hand, bankers said that their subsidized KPR NPL ratio would still be maintained until the first quarter of 2024. (Source : Kontan) Comment : We expect non-performing loans for the segment will continue to be manageable amid the continuing uncertainty. We also believe the pressure on the segment is likely not to impact the overall consumer segment and total loan NPL of a bank, as it mostly only records a small portion of the total mortgage segment and total portfolio. Maintain our OW stance for banks with BBRI and BBNI as the top picks.