Banking - The property sector's NPL softened in May24

Banking - The property sector's NPL softened in May24 The shadow of a decline in credit quality in the property sector will begin to subside in May 2024. This is reflected in the ratio of non-performing loans (NPL) in banks in this sector, which is starting to decline. Referring to the latest Bank Indonesia (BI) data, the NPL for property loans in May 2024 was at the level of 2.69%, down from the previous month at the level of 2.72%. This achievement is also starting to be low when compared to the same position last year, which was at 2.72%. However, the property NPL position in May 2024 is not yet lower than the position at the end of 2023. The property NPL position in that time period was quite low, at 2.47%. In detail, the decline in property NPLs occurred in the shophouse property credit and flat property credit segments, which fell 49 bps and 5 bps, respectively, from the previous month. Meanwhile, landed property credit looks stagnant at the level of 2.60%. In terms of property credit distribution, growth appears to be accelerating until May 2024 and will be the highest throughout 2024. BI data records that overall property credit growth grew 10.55% yoy to IDR896.9 tn. As a comparison, property credit growth in May 2023 was only around 9.13% yoy, with a value of IDR811.38 tn. Meanwhile, property credit growth in April 2024 was recorded at only around 9.78% yoy. (Source : Kontan)