Banking - NPL increasing, a number of banks aim to reduce KPR NPL in 2024

Banking - NPL increasing, a number of banks aim to reduce KPR NPL in 2024 The slowing rate of property credit growth throughout 2023 means that the property non-performing loan (NPL) ratio will also slowly increase. Bank Indonesia noted that as of November 2023, the NPL ratio for property ownership loans in banks was at the level of 2.59%. This position has increased further from the NPL ratio as of November 2022 which was 2.40%. On more detailed, the highest NPL for property loans was contributed by shophouse/shophouse ownership loans at 4.47%. (Source: Kontan). Comment: We believe the asset quality improvement will continue solid this year and demand likely to steady. On this backdrop we believe NPL will remain well behaved and thus will overall will managed bank total gross NPL to arrive within the similar rate with last year. Our expectation on soften rate hike and loan yield repricing should also play important role and help AQ metrics to stand still.