Sunarso, the CEO of PT Bank Rakyat Indonesia (Persero) Tbk, or BRI, has announced that the company has written off non-performing loans amounting to IDR 24 trillion that were extended to Micro, Small, and Medium Enterprises (SMEs) affected by the COVID-19 pandemic. Sunarso explained that, for this purpose, they decided not to take the entire substantial margin or profit of BRI as earnings.

"Our current reserve summary stands at 228 percent, which is more than sufficient. Why did it decrease from 260? Well, it's to cover the costs of clearing non-performing loans for SMEs amounting to IDR 24 trillion, without seeking assistance from Mr. Arya Sinulingga (Ministry of State-Owned Enterprises)," he stated during the Ngopi BUMN event on Thursday, October 26th.

Sunarso clarified that the removal of these loans did not affect BRI's profit, as evidenced by BRI's profit reaching IDR 44 trillion in the third quarter of this year. This profit was accompanied by BRI's asset growth of 9.93 percent (year on year/yoy), reaching IDR 1,851.97 trillion in the third quarter of 2023.

Sunarso pointed out that this performance was mainly supported by BRI's double-digit growth in loan disbursement, third-party funds (Dana Pihak Ketiga or DPK) collection, cheap funds, maintained credit quality, and an increasing proportion of fee-based income in BRI's overall revenue.

In terms of intermediary functions, he mentioned that loan disbursement had grown by 12.53 percent (yoy), reaching IDR 1,250.72 trillion by the end of September 2023.

"This achievement aligns with BRI's projections, where the company aims for credit growth of between 10 and 12 percent (yoy) by the end of this year," Sunarso stated in the official statement on Wednesday, October 25th.

He also added that all segments of BRI's loans recorded positive growth. Specifically, loans extended to SMEs grew by 11.01 percent, from IDR 935.86 trillion to IDR 1,038.90 trillion by the end of the third quarter of 2023. Consequently, SME loans accounted for 83.06 percent of the total loans.

Regarding third-party fund collection (DPK), BRI recorded a total of IDR 1,290.29 trillion, growing by 13.21 percent (yoy).

"The main support for BRI's DPK still comes from cheap funds (CASA), with a proportion of 63.64 percent, equivalent to IDR 821.14 trillion," said Sunarso.