Bank Rakyat Indonesia reports 2.1% NPL for 2016

Analysts think the bank can maintain this low NPL in 2017.

Maybank Kim Eng analysts take as positive indicators for 2017 Bank Rakyat Indonesia's (BBRI) lower than expected NPL of 2.1% by YE16 (vs. our 2.3% estimate) and declining SML to 4.3% (vs. 4.8% in 2015). The low NPL was again driven by micro (0.99% NPL), SOE (0% NPL, and also consumer lending (1.18% NPL).

"With good risk control over segments that cover 65% of its loan portfolio, we think BBRI will be able to maintain 2017 NPL in-line with our 2.3% forecast. Our forecasts takes into account a normalized NPL in the small commercial loan business back to 3.7%, and a 60% potential upgrade to performing loans of IDR4.7t NPL in the corporate segment by 1Q17."