Bank Credit Risk Remains High in Q2 2021

The implementation of community activity restrictions during the Covid-19 coronavirus pandemic has impacted bank credit. This is reflected in the still high bank loan at risk (LaR) of 22.67% until the end of Q2 2021.

In detail, the LaR from gross non-performing loans (NPL) was 3.24%. The LaR from credit restructuring with collectibility 1 was recorded at 14.03%.

The LaR from credit restructuring with collectibility 2 was 3.29%. Meanwhile, the LaR from non-restructured credit with collectibility 2 was 2.1%.

Credit risk started to increase since Q1 2020 with an LaR of 11.6%. The figure jumped to 20.66% in Q2 2020 and peaked at 23.38% in the third quarter of last year.

However, credit risk began to decline to 23.38% in Q4 2020. The figure further decreased to 23.29% in Q1 2021 and 22.67% in Q2 2021.

To curb the surge in non-performing loans, the government provided leniency to debtors in restructuring credit. In Q2 2021, bank credit restructuring reached Rp 1,066 trillion or 19.1% of the total. At the end of 2019, or before the corona pandemic, credit restructuring was only Rp 300 trillion or 5.34%.

The value of credit restructuring in Q2 2021 increased by 22.32% year-on-year (yoy). Compared to the previous quarter (quarter-to-quarter/q-to-q), the value decreased by 2.49%.