Mid-Tier Indonesian Banks Focus on Diversification for Profitability

Digital Transformation Driving Non-Interest Income

Indonesian mid-tier banks are increasingly relying on income diversification strategies to maintain profitability in a challenging environment. PT Bank Woori Saudara Indonesia 1906 Tbk (SDRA) is a prime example of this approach. As of September 2025, the bank's non-interest income reached Rp160.86 billion, demonstrating the success of its diversification efforts.

Key Components of Non-Interest Income

1. Commission and administration fees: Rp103.75 billion
2. Trading profits: Rp51.23 billion from spot and derivative transactions
3. Other income: Rp5.88 billion

The bank's net interest income remained stable at Rp1.29 trillion, showing that the diversification strategy is complementing rather than replacing traditional banking revenue.

Digital Transformation as Growth Catalyst

SDRA's digital transformation has been instrumental in both cost efficiency and revenue generation. The bank has:

1. Enhanced digital services: Expanded mobile and internet banking capabilities
2. Improved operational efficiency: Implemented automation and AI-based anti-fraud systems
3. Leveraged international connections: Utilized Woori Bank Korea's network for cross-border remittances

These initiatives have contributed to a stable Pre-Provision Operating Profit (PPOP) of approximately Rp365 billion as of September 2025. The bank's strong capital position, with a Capital Adequacy Ratio (CAR) of 32.25%, provides a solid foundation for continued growth.