Bank bjb Rating Downgrade Reflects Rising Asset Quality Risks
Swan.my.id - Jakarta, Pemeringkat Efek Indonesia (Pefindo) lowered Bank bjb’s (BJBR) corporate rating to idAA- from idAA. The revision also affected several debt instruments issued by the bank, while the rating outlook remained stable.
Pefindo also lowered the rating of Bank bjb’s Sustainable Continuing Bonds I to idAA-. The ratings of Sustainable Subordinated Bonds II, III, and IV fell to idA from idA+. Meanwhile, the rating of Sustainable Perpetual Securities I declined to idA- from idA.
The Bank bjb rating downgrade reflects continued pressure on the bank’s financial profile, particularly its asset quality. Pefindo expects asset quality to remain under pressure in the short term as repayment capacity weakens in several productive credit segments.
Bank bjb Rating Downgrade Follows Asset Quality Pressure
Pefindo linked the pressure to reduced transfers from the central government to regional governments. The condition has affected borrowers’ repayment capacity, especially in productive credit segments connected to regional economic activity.
Bank bjb’s non-performing loan (NPL) ratio rose to 3.3% in mid-2026 from approximately 2.8% at the end of 2025. During the same period, the special mention loans ratio increased to 4.3% from 3.8%.
The increase in problem loans came alongside weaker loan-loss coverage. The bank’s allowance coverage ratio for NPLs declined to 85.8% in the first half of 2026 from 91.6% at the end of the previous year.
According to Pefindo, the decline indicates weaker provisioning coverage as asset quality deteriorates. Bank bjb plans to write off Rp814 billion in loans this year, with estimated recoveries of Rp280 billion.
Short-Term NPL Outlook Remains a Key Concern
Despite the planned write-offs and expected recoveries, Pefindo projects Bank bjb’s NPL ratio to remain within the range of 2.8% to 3% in the short term. This projection suggests that asset quality could remain a key factor influencing the bank’s financial performance.
The agency’s assessment also considers the potential effect of weaker regional fiscal transfers on borrowers. If repayment capacity continues to weaken, pressure on productive loans could persist.
Bank bjb Maintains Strong Business and Liquidity Profiles
Despite the rating revision, Pefindo said Bank bjb benefits from a very strong business position. The bank has a captive market in West Java and Banten, which supports its business profile.
Bank bjb also maintains very strong capitalization and liquidity profiles. These strengths support the bank’s current rating despite the pressure on asset quality.
However, the rating remains constrained by intense competition outside its captive market. Pefindo also highlighted the relatively high NPL ratio in the productive credit segment as a limiting factor.
The ratings of the subordinated bonds sit two levels below the corporate rating because the instruments carry a risk of being written off under non-viability conditions. The perpetual securities rank one level below the subordinated bonds because they have a more junior status.
The perpetual securities are classified as additional tier 1 capital and allow full discretion in coupon deferral. Pefindo stated that the rating could improve if Bank bjb substantially strengthens its financial profile.
