Jakarta. State-owned lender Bank Tabungan Negara (BTN), has reduced its non-performing loans (NPL) by almost Rp 900 billion ($57.92 million) throughout 2023 with the help of state asset management company Perusahaan Pengelola Aset (PPA).

"NPL has significantly decreased. Preliminary calculations indicate it's below 3%. The significant decline in NPL sets the stage for a very promising recovery in 2023," Nixon LP Napitupulu, the President Director of BTN, said on Thursday. BTN's NPL ratio was 3.53 percent in the third quarter of 2023.

He estimates that the company has accumulated more than Rp 800 billion from fee-based income, which includes payments from ailing state insurer Asuransi Jiwasraya.

Nixon anticipates BTN's profit in 2023 to grow by approximately 8% to 10% as compared to Rp3.04 trillion recorded in 2022. This positive trend is attributed to the significant reduction in NPL.

BTN disbursed loans and financing totaling Rp318.30 trillion until the third quarter of 2023, showing a year-on-year growth of 9.87%. This growth is driven by the increase in subsidized mortgage loans, which rose by 11.87% year on year from Rp140.97 trillion to Rp157.71 trillion in the third quarter of 2023. Additionally, BTN recorded a 1.67% year-on-year increase in net profit in the first nine months of this year, reaching Rp 2.3 trillion.

Muhammad Teguh Wirahadikusumah, the President Director of PPA, reaffirmed the company's commitment to upholding the stability of the national banking sector through effective NPL resolution solutions.

"The resolution of BTN's NPL is anticipated to unlock extensive opportunities for collaboration within the banking industry, particularly with the State-Owned Banks Association (Himbara) and private banks, delivering value and benefits to the Indonesian banking sector," Teguh said on Friday.