BBTN - Bad debt sales to support fee based income

BBTN - Bad debt sales to support fee based income Resolving assets that have become bad debts became the focus of PT Bank Tabungan Negara (BBTN) in recent years. As a result, the recovery from these sales is considered to have contributed significantly to the fee-based income obtained throughout 2023. According to BBTN, the bank fee-based income could reach around IDR4 tn. Whereas, the average fee base obtained by the largest KPR disbursing bank is in the range of IDR2 tn. Throughout 2023 alone, his party had succeeded in making a recovery of IDR800 bn. Primarily, the majority came from claims paid by IFG Life for credit life insurance worth IDR492 bn. (Source: Kontan) Comment: Fee based income most of the time become as additional catalyst to bank growth. Despite it came from bad debt or asset recovery, it will make positive impact to overall BBTN’s book and lower its risk. This year, we think the bank will continue to record stable subsidized loan growth, with a potential of better non subsidized housing back by the government policy on the property sector. BBTN could also record better loan growth from its non housing loan segment.