Indonesian bank Jago is also expected to increase its loan book this year, executive says

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Gojek-backed digital lender Bank Jago reported a net profit of around 86 billion rupees ($6 million) in 2021, driven by loan growth and a falling bad debt rate, the report said. leader.

This is the first year of profits for the digital bank which reduced its net losses to 32.6 billion rupees ($2.3 million) in the nine months of 2021 from 105.7 billion rupees ($7.45 million) over the same period in 2020.

Indonesian carpooling giant Gojek took over the reins of Bank Jago in 2019.

“The achievement in 2021 is the start of Jago’s operations with a solid foundation that has been built over the past two years,” Kharim Siregar, Chairman and CEO of Bank Jago, told a press briefing.

Bank Jago had a very low loan base when it started operations in 2019. As a result, it could disburse loans of 5.37 trillion rupees ($375.15 billion) by the end of 2021, which represents a 491% year-over-year increase. .

But, the basic factor is not the only thing to look at. “Being in the right digital ecosystem could be a stimulus to increase lending,” Siregar added.

He claimed that the collaboration makes his expansion faster, efficient and less risky, which is reflected in the bad debt rate of 0.6% from 0.6% in 2021.

In 2021, Jago has forged ties with several companies in the fields of fintech, finance, digital finance, among others, which have helped to complete its ecosystem with Gojek, the wealth management platform Bibit and the platform Stockbit online trading platform.

The integration increased Jago’s customer base to 1.4 million users in 2021. The lender’s deposit jumped 357% to 3.68 trillion rupees ($257 million), while CASA ( current account savings account) increased by 667% to reach 1.68 trillion rupees ($117.36 million). ). At the end of 2021, the CASA share is 45.6% compared to 27.2% at the end of 2020.

In extension

Despite very high growth in 2022, Jago remains optimistic about his ability to increase loans and net profit this year as well. Bank Jago Senior Vice President Arief Harris Tandjung said the 2022 loan portfolio will see 30-40% growth.

“We can’t see high growth from 2021, but it will outpace industry growth by around 30-40%,” he referred to a $5 trillion loan disbursement. Rp per month which will balance with the quality of the debt ratio.

Siregar added that the launch of Shariah banking apps in February 2022 is also part of a strategy to boost lending growth. The app allows customers to have savings with a wadiah contract – deposit of funds or assets by a person with an Islamic bank – known as “pockets” and integration with a digital ecosystem such as Gojek , GoPay and Bibit.

In terms of capital, in early 2021, the lender raised funding from a rights issue of 7.05 trillion rupees (nearly $500 million) through the sale of new shares. Singapore’s sovereign wealth fund GIC participated in the rights issue by investing $222 million in it, for a stake of around 9.11%, according to a disclosure to the Indonesia Stock Exchange (IDX).

Tandjung said Jago had no plans to add capital as it posted a high capital adequacy ratio (CAR) of 170% and total capital of 8.3 trillion rupees (579.82 millions of dollars). “Our capital is the highest compared to other digital banking services,” he added.

From GoTo’s planning for the IPO, Tandjung hopes it will have a positive impact on Jago since the infrastructure leverage is higher than before. GoTo, formed by the merger of the country’s biggest startups Gojek and Tokopedia, is reportedly looking to raise $1.5-2 billion in an IPO this year at a valuation of around $31-42.7 billion. dollars on the back of growth in its gross trading volume (GTV) .

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