Jakarta – Bank of China Jakarta Branch reported a 16.60% year-on-year (YoY) decline in net profit to Rp673.27 billion in June 2026, down from Rp807.24 billion in the same period last year. The weaker earnings came amid only modest growth in interest income, while interest expenses surged significantly. Overall, the bank remained profitable, but mounting pressure on margins weighed on its financial performance compared with the previous year.
According to Bank of China’s published financial statement released on Monday (July 27), the bank’s interest income increased by 1.04% to Rp1.90 trillion, up from Rp1.88 trillion in June 2025. However, the increase was insufficient to offset a 17.56% jump in interest expenses, which climbed to Rp789.25 billion. As a result, profitability from the bank’s core lending business narrowed, placing direct pressure on net earnings.
The impact was reflected in the bank’s net interest income (NII), which declined 8.11% to Rp1.11 trillion. Meanwhile, the net interest margin (NIM) contracted from 3.29% to 2.54%. The lower NIM indicates weakening efficiency in the bank’s core intermediation business, reducing its ability to generate profits from interest-earning assets.
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Profitability was further squeezed as other operating expenses surged 58.57% to Rp196.54 billion. Consequently, the operating expenses to operating income (BOPO) ratio rose from 49.85% to 62.03%, signaling weaker operational efficiency. The cost-to-income ratio (CIR) also increased from 26.58% to 39.69%, reflecting less efficient cost management compared with a year earlier.
On the intermediation front, however, Bank of China delivered a solid performance. Third-party funds (DPK) grew 18.64% to Rp68.91 trillion, significantly outperforming Indonesia’s banking industry deposit growth of 8.1% in June 2026. The increase was primarily driven by a 20.34% rise in current account and savings account (CASA) deposits to Rp59.80 trillion, lifting the CASA ratio from 85.56% to 86.79% and strengthening the bank’s low-cost funding base.
Loan disbursement also expanded by 15.77% to Rp32.91 trillion, exceeding the national banking industry’s credit growth of 12.1% during the same period. More importantly, asset quality improved substantially, with the gross non-performing loan (NPL Gross) ratio plunging from 2.80% to just 0.14%, well below the regulator’s 5% threshold. Meanwhile, the net NPL ratio remained at 0.00%, indicating an exceptionally low level of credit risk.
The bank’s balance sheet also strengthened considerably. Total assets increased 25.06% year-on-year to Rp93.74 trillion, compared with Rp74.95 trillion in June 2025. Asset growth outpaced loan expansion, suggesting that liquidity remained robust, although the loan-to-deposit ratio (LDR) edged down from 48.30% to 47.16%, still well below the industry’s ideal range of 78%–92%, leaving ample room for future lending growth.
Other financial indicators showed that the bank’s profitability weakened during the period. Return on Assets (ROA) declined from 2.80% to 1.97%, while Return on Equity (ROE) fell from 12.34% to 9.20%. The decline in both ratios indicates that the bank generated lower returns from its assets and shareholders’ equity than it did a year earlier, although both metrics remained at healthy levels.
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Led by Sun Shangbin, Country Manager of Bank of China Jakarta Branch, the bank continued to maintain solid business fundamentals through strong growth in assets, deposits, and lending, all of which outperformed industry averages.
The significant improvement in asset quality further strengthened the bank’s position by reducing credit risk to an exceptionally low level. Nevertheless, declining earnings, a narrower net interest margin, and rising operating costs remain key challenges that the bank will need to address to restore stronger profitability in the coming periods. (*) Ari Nugroho
