2Q18 Performance Review: Unattractive Interest Income
BMRI posted the decline of 0.2% y-y to IDR19.6 trillion in the interest income as since the 3Q16 its interest income underperformed. The interest income was flat at the range of IDR19-20 trillion per quarter. The flat growth since the last two years occurred along with the sluggish growth in credit and the downtrend in loan yield.
On the other side, the net profit edged up 17.6%, but the hike was more attributable to the temporary hike of 22.9% y-y from IDR5.8 trillion to IDR7.1 trillion in non-interest income.
BMRI posted the growth of 11.8% y-y from IDR682 trillion in the 2Q17 to IDR762.5 trillion in the 2Q18’s credit. The growth was in stark contrast to the growth of 7.1% in the 1Q18’s credit. Thanks to the corporate segment posting the buoyant growth of 23.1% to IDR300.1 trillion that BMRI enjoyed the rosier growth in credit.
However, the buoyant credit growth was coupled with a steep decline into 9.5% in the 2Q18’s loan yield a way lower than the 1Q18’s loan yield of 10.1%. We lower the estimate of the 2018’s interest income from IDR86.8 trillion to IDR82.9 trillion after the downturn in loan yield.
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