S&P lifts Bank Rakyat Indonesia

S&P said it raised the long-term issuer credit rating on PT Bank Rakyat Indonesia (Persero) Tbk. to BBB- from BB+, along with the short-term rating to A-3 from B.

The outlook is stable.

The upgrades reflect the bank's good risk management and focus on micro loans, S&P said.

The ratings support its asset quality amid volatility in the currency and commodity markets, S&P said.

The bank's sizable exposure to micro loans, at 34% of the loan portfolio, underpins its above-average asset quality, S&P said.

The bank's micro loans portfolio has a low average ticket size and good geographical spread, the agency said.

These factors mitigate the risk of a sharp rise in delinquency, S&P said.

The bank's strong understanding of the micro loan market, its extensive reach in rural areas and its rigorous monitoring and collection mechanisms have helped it to maintain low non-performing loans in this segment despite the low incomes of these borrowers, the agency said.

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