Bank Jago sees first profits since Gojek-backed management took over

Bank Jago, an Indonesia-based digital bank, earned 14 billion rupiah (around US$1 million) in net profit in the third quarter of 2021. It hit the milestone after recording quarterly losses for the past six years – well before the new management, backed by Gojek, took over the bank in 2019.

The major contributor to this jump is a surge in loan disbursements, which increased almost 72% to roughly US$263 million from around US$153 million in the previous quarter. It’s also a 6x bump compared to the same period last year.

The growth came after the company’s partnerships with Gojek, investment app Bibit, and several peer-to-peer lending firms in the country.

Coming hand in hand with the increase in loans, the bank’s income from interests saw an almost 6x leap to a hair above US$25 million. The company also boosted net interest margin – a key profitability metric – to 6.1% from 4.4% in the same period last year.

In a statement, Bank Jago said that despite the surge in disbursements, only 0.6% of loans are non-performing.

Another factor that played into the bank hitting profitability is an increase in the number of current account savings accounts it handles, which is a product that combines the features of both savings and checking accounts.

The so-called “low cost” offering currently covers 38.72% of the bank’s total cash handled across its savings products, compared to 22.74% last year. At the same time, the total cash in the savings accounts of Bank Jago users increased to roughly US$180 million.

Earlier this month, Bank Jago secured an undisclosed amount of funding from Ribbit Capital, an investor in companies such as Revolut, BharatPe, Robinhood, and Coinbase. The investment boosted the bank’s current capital to about US$565 million.

Currency converted from Indonesian rupiah to US dollar: US$1 = 14,160 rupiah.