Gojek-backed Bank Jago records nearly 8x jump in loan disbursements

Indonesia’s Bank Jago said it has recorded a 695% jump in loan disbursements from a year earlier.

The digital bank, in which super app Gojek holds a 22% stake, said that it had disbursed loans worth 2.17 trillion rupiah (US$149.8 million) by the end of June 2021.

Bank Jago also noted that it has seen a huge 423% rise in its net interest income of 139 billion rupiah (US$9.6 million), which is the difference between interest earned from lending activities and the interest it pays out to depositors.

Photo credit: Bank Jago

Bank Jago said it has seen an increase in its lending in the past three months due to its collaborations with various lending and fintech companies. The Indonesia-based firm also attributed the increase to the integration of its application with Bibit’s investment platform and Gojek’s super app.

Furthermore, Bank Jago says its cost-to-income ratio declined from 289% in the first half of 2020 to 129% in the same period this year. Its net interest margin ratio, a key profitability metric, also rose from 4.1% to 5% in the half-year.

The digital bank added that its operating expenses increased by 135% as it continued to invest in information technology and new recruitments. Overall, the company recorded a net loss of 47 billion rupiah (US$3.2 million).

“So, our performance has not been positive due to the investment factor. We consider this as something reasonable and still in line with the initial planning. This investment will certainly yield results in the future,” Bank Jago’s president director Kharim Indra Gupta Siregar said in a statement.

Bank Jago, which previously operated as a boutique bank called Bank Artos Indonesia, was acquired in 2019 by Jerry Ng, former president director at Bank BTPN (which owns digital bank Jenius), and Patrick Walujo, co-founder of investment firm Northstar Group. Northstar Group notably is an early backer of Gojek.

See also: Why Indonesia’s tech giants find digital banks irresistible

Bank Jago made headlines later that year when Gojek, via its payments and financial services arm GoPay, upped its stake in the Indonesian bank to 22.1%.

According to a Reuters report, Bank Jago is planning to allow its clients to open and manage bank accounts through Gojek’s app this quarter. It also intends to add loan services to the app.

Last week, Bank Jago announced that it has become one of the cashless payment methods on the Gojek app. Users of the super app can now pay for transportation, food delivery, and bill payment services using their Bank Jago balance.

Currency converted from Indonesian Rupiah to US dollar: US$1 = 14,490 rupiah