Bank QNB Indonesia to Close Branches Amid Financial Challenges

Strategic Branch Consolidation

PT Bank QNB Indonesia Tbk. (BKSW), a subsidiary of QNB Group from Qatar, has announced plans to close several branches across Indonesia starting January 5, 2026. The affected branches include Bandung Dago, Semarang Gajah Mada, Surabaya Darmo, and Jakarta Pluit, with operations being consolidated to other Jakarta branches such as Jakarta SCBD and Jakarta Gajah Mada.

Financial Performance Overview

The bank reported a significant decline in financial performance for Q3 2025. Net profit for the period dropped by 78.66% YoY to Rp14.46 billion compared to Rp67.78 billion in the same period last year. This decline was primarily attributed to a 21.90% YoY decrease in net interest income, which fell to Rp273.54 billion from Rp350.23 billion. The reduction was caused by a 20.64% increase in interest expenses to Rp243.97 billion, despite a 6.33% decline in interest income to Rp517.51 billion.

Operational Efficiency Measures

On the positive side, Bank QNB Indonesia managed to reduce other operational expenses by 18.08% YoY to Rp221.94 billion. Specific reductions were seen in promotion expenses (down 61.74% to Rp901 million), other expenses (down 32.04%), and impairment (down 19.71%). However, personnel expenses increased by 7.07% to Rp202.61 billion. As a result, operating profit declined by 34.94% YoY to Rp51.59 billion.

Growth in Core Banking Business

Despite the challenges, the bank demonstrated growth in its core banking activities. Total credit extended grew by 17.05% YoY to Rp8.39 trillion, while third-party funds (TPF) increased by 31.13% to Rp7.22 trillion. The TPF growth was driven by significant increases in savings deposits (up 105.93% to Rp614.67 billion) and time deposits (up 32.62% to Rp5.90 trillion), although current accounts declined by 6.78% to Rp711.72 billion.

Asset Quality and Capital Position

The bank's financial health indicators showed mixed results. The capital adequacy ratio (CAR) decreased slightly from 61.55% to 59.58%. Asset quality deteriorated with gross NPL rising to 3.15% from 1.28%, and net NPL increasing to 0.82% from 0.19%. The net interest margin (NIM) contracted from 4.27% to 3.14%, while the cost-to-income ratio worsened from 88.36% to 92.19%.