Jakarta – Bank Woori Saudara Indonesia 1906 (BWS) recorded a sharp decline in financial performance in the first half of 2025. The bank’s net profit plummeted 74.86% year-on-year (yoy), from Rp328.87 billion in June 2024 to Rp82.67 billion in June 2025. This drop in profit occurred amid a decrease in interest income and a significant surge in other operating expenses.
According to BWS’s financial report as of June 2025, quoted on Thursday, July 31, 2025, interest income slightly declined by 1.11% to Rp1.98 trillion, while interest expense fell deeper by 4.86% to Rp1.11 trillion. As a result, net interest income increased by 4.14% to Rp871.02 billion. The improvement in net interest income lifted the net interest margin (NIM) to 3.29%, up from 3.14% in the same period last year, reflecting more effective management of productive assets.
However, pressure came from a sharp rise in other operating expenses, which nearly doubled—up 89.48% to Rp760.91 billion. This cost surge became the main factor behind the steep decline in net profit. The efficiency ratio worsened to 94.92% from 81.37%, far above the ideal level of 85%, signaling that the bank must improve operational efficiency.
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BWS’s intermediation function also weakened. Third party funds dropped 20.19% YoY to Rp26.83 trillion, far below the banking industry average growth of 6.96%, according to the Financial Services Authority (OJK). Low cost funds (current accounts and savings accounts/CASA) slumped 26.40% to Rp7.89 trillion, causing the CASA ratio to decline to 29.42% from 31.90%. This decline could increase the cost of funds in the future if not addressed promptly.
On the lending side, BWS’s loan disbursement declined slightly by 1.96% to Rp46.88 trillion, while the industry grew by 7.77%. Although the drop was minor, asset quality deteriorated. Gross non performing loans (NPL) rose from 1.53% to 2.39%, and net NPL increased from 0.85% to 1.57%. While still below the regulator’s safety threshold of 5%, the rising NPL ratios indicate growing pressure on asset quality.
Furthermore, BWS’s total assets shrank by 3.65% to Rp58.28 trillion, indicating overall contraction in performance. Core capital also decreased by 1.34% to Rp11.43 trillion. However, the capital adequacy ratio (CAR) remained solid at 31.11%, an improvement from last year.
Profitability ratios also deteriorated significantly. Return on assets (ROA) dropped from 1.49% to 0.38%, while return on equity (ROE) plunged from 6.59% to 1.43%, reflecting the bank’s weakened ability to generate profit from its assets and capital.
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Another critical concern is the loan to deposit ratio (LDR), which soared to an extremely high level, from 142.25% to 174.73%, far exceeding the ideal range of 78%–92%. The excessively high LDR indicates an aggressive lending posture despite a sharp decline in deposits. This raises liquidity risk, and BWS must exercise more caution to avoid imbalances between funding sources and loan distribution.
With various indicators declining, particularly in operational efficiency and profitability, Infobank Institute believes that BWS, currently led by President Director Kim Eungchul, must promptly implement strategic improvements. Efficiency measures and enhancements in asset quality should be the main focus for the remainder of 2025 to prevent further deterioration in the bank’s performance. (*) Ari Nugroho
