Return on Equity Soars to 21% as BRI Shares Hit All-Time High Again
JAKARTA, Indonesia, May 25, 2023 /PRNewswire/ -- PT Bank Rakyat Indonesia (BRI) Persero Tbk. (IDX: BBRI) has achieved a significant milestone, reaching its all-time high in share trading. This marks the highest value since its listing in 2003, demonstrating the company's pursuit of post-pandemic profitability, with a targeted return on equity (ROE) of 19% by 2025.
On 19 May 2023, BRI achieved an all-time high with shares reaching IDR 5,400 per share, resulting in a market capitalization of IDR 818.4 trillion. The positive trend continued into the following week, as BRI shares exceeded IDR 5,500 per-share on 23 May 2023.
BRI President Director Sunarso emphasized that this achievemnt signifies investors' acknowledgment of BRI's commitment to growth. The establishment of the Ultra-Micro (UMi) Holding through a rights issue in late 2021 has strengthened the company's capital. Additionally, this corporate action injected an additional IDR 41 trillion of capital from investors.
"Our capital adequacy ratio (CAR) is 25.1%. This puts pressure on the ROE, causing it to be lower because the capital has increased. This is one of the reasons why BRI shares traded below IDR 5,000 last year," explained Sunarso.
As BRI focuses on the MSME segment, the company faces a distinct challenge. "The primary obstacle lies in effectively leveraging its capital. Thus, BRI's main challenge is to leverage its capital through three things: growth, growth, and growth."
Two years since the rights issue and the establishment of the UMi Holding, BRI has proven its ability to grow. Currently, BRI's CAR is considered adequate at 24.9%. At the same time, BRI was able to deliver a return on equity of 21.18% in Q1 2023.
Concluding his remarks, Sunarso stated, "I do not believe there is any bank worldwide that can achieve a CAR of 25% while simultaneously attaining a ROE of 21%. Our commitment lies in sustaining continuous growth, and I consider that to be the key."
As an overview, BRI's ROE was approximately 20% before the pandemic hit in 2019. It experienced a temporary decline, dropping below 15% in 2020. However, BRI's ROE rose to 17.22%in Q1 2022 and further increased to 21.18% in Q1 2023.
More information about BRI can be accessed at www.bri.co.id.
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SOURCE PT Bank Rakyat Indonesia Tbk (BRI)