Permata Bank's NPLs Surge Threefold

PT Bank Permata Tbk's gross Non-Performing Loan (NPL) ratio reached 8.8 percent in 2016, a more than threefold increase from the previous year. This figure is above the banking industry's NPL average of 2.93 percent and exceeds the regulatory limit of 5 percent. The bank's (BNLI code) net NPL also rose to 2.2 percent in 2016 from 1.4 percent the previous year.

Bank Permata's allowance for impairment losses on financial assets (CKPN) surged by 232 percent to Rp 11.26 trillion in 2016. As a result, the bank, owned by Astra International and Standard Chartered, incurred a significant loss of Rp 6.52 trillion—the largest in its history.

To improve its performance, Bank Permata sold Rp 1.124 trillion worth of its non-performing loan portfolio to CVI CVF III Lux Master SARL. Furthermore, Bank Permata conducted a Rp 3 trillion rights issue (HMETD) to increase its capital.