Press Release - August 26, 2020

Jago’s Performance Improves After Acquisition and Rights Issue

Jago’s Performance Improves After Acquisition and Rights Issue Download image

The performance of PT Bank Jago Tbk (Bank Jago) in the second quarter 2020 was relatively improving after the acquisition had finished in December 2019 and proceeded with the rights issue in April 2020. The bank’s assets have increased with financial indicators showing a positive trend. Based on the capital and liquidity, the bank is not only healthy but also strong enough to support the plan to expand.

The Bank’s assets have increased by 146 percent to Rp 1.7 trillion (year-on-year/yoy) by the end of June 2020. From that number, the ratio of non performing earning assets to total assets is maintained at 0.17%. This condition is better than the same position last year of 4.83%. Whereas the gross non performing loan (NPL) dropped from 6.41% in June 2019 to 0.92% in June 2020.

From the lending site, there was a decrease by 27% to Rp 273 billion. While the third party fund also dropped 26% to Rp 405 billion. This was mainly caused by the decreasing business activities and economic growth due to the COVID-19 pandemic. “Bank Jago’s lending and third party fund are relatively small. However, we are optimistic the bank will continue to grow and can benefit greatly to the digital economic development along with time, especially after we optimize the implementation of our business model,” said Bank Jago CEO Kharim Siregar during the virtual Public Expose held by the Indonesian Stock Exchange.

Kharim explained that the management focus during the first semester of 2020 was finishing the rights issue, designing business model and redesigning the organization to that it could follow the aspiration to become a technology-based bank. This would implicate the increasing operational cost because the company invested heavily in technology and recruit manpower who were relevant to the bank’s aspiration. “This is our commitment since the start we acquire the bank. We will continue innovate and optimize the latest technology to give a new [user] experience in banking,” he said.

Bank Jago has a commitment to become a technology-based bank which provides financial solutions for its customers and economy business players by strengthening the digital ecosystem. This commitment is build based on our belief that digitalization will play a vital role in improving entrepreneurship, equality of welfare and in the end will encourage national economic growth. “We will broaden our partnership, build collaboration and synergy with all digital economy business players to materialize our goal. The collaboration principle will be a key factor,” he said.

Bank Jago will collaborate with all platforms starting from e-commerce, ride hailing transportation application, travel industry, online shop, entertainment and digital payment and fintech lending. Bank Jago will also provide lending with partnership bases focusing on fintech ecosystem and supply chain. “Our target segment is middle- and mass-market, which most of them are Micro, Small and Medium Enterprises (MSME). Of course, we have the aspiration to speed up the MSME digitalization so that they can have a better competitiveness,” said Kharim.

As for the COVID-19, the impact to Bank Jago’s NPL and credit restructuring has been very limited. Besides, Bank Jago has been more selective in providing lending since the pandemic. “We will start the expansion in the second semester after launching the [mobile] application and gradually implementing the business model,” said Kharim. With all conditions, Bank Jago posted a net loss of Rp 51 billion in the first semester of 2020.

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