ARTO Bank Jago's Loan Book Grew 32% - And Operating Cash Flow Nearly Vanished

Growth Finally Costs Something

The FY2023 post closed on a bank that had just posted its best conventional-banking quarter in over a year, a Sharia Business Unit that had shed 80.5% of its financing book, and a CASA^» ratio that had reversed course as time deposits nearly doubled to fund loan growth. Q1 2024 is the quarter where that funding scramble shows up somewhere new: the cash flow statement. Loans grew 32% YoY and 12.1% quarter-over-quarter (from Rp12,591,500 million to Rp14,118,441 million), consuming Rp1,367,772 million in cash during the quarter - almost exactly matching the roughly Rp1.31 trillion in new deposits the bank brought in over the same period. The two nearly cancel out, and net cash from operating activities came in at just Rp73,823 million, down 72.4% from Rp267,342 million in Q1 2023 - the tightest cash-generation quarter recorded anywhere in this backfill since 2021, before the bank had reached sustained profitability. Capital expenditure kept climbing on top of that (Rp217,441 million, up 27.6% YoY, primarily software and platform development), a balance-sheet-driven squeeze rather than a going-concern signal.

This isn't a business burning cash to survive - net income was positive and growing. It's a bank whose loan book has gotten large enough that even genuinely strong deposit growth barely covers what the balance sheet needs to keep expanding. That's a normal thing for a scaling lender to run into eventually; the question worth tracking is whether it recurs next quarter or was a one-off timing mismatch between when deposits landed and when loans were disbursed.

The other half of the quarter is more straightforwardly good news. Bank Jago's total net income reached Rp21,707 million, up 24.0% YoY from Rp17,504 million in Q1 2023. Backing out the Sharia Business Unit's own disclosed Q1 2024 net income (Rp14,114 million) implies standalone conventional-bank net income of approximately Rp7,593 million - a genuine swing from Q1 2023's implied conventional-bank loss of roughly Rp17,833 million (Q1 2023's total bank net income of Rp17,504 million minus the Sharia unit's own disclosed Rp35,337 million that quarter, which means the Sharia unit was carrying the entire bank a year ago while conventional banking lost money). That YoY swing - conventional banking loss to conventional banking profit - is the real continuation of FY2023's "second straight improving quarter" story. Sequentially, though, Q1 2024's implied conventional profit (~Rp7,593 million) is well down from Q4 2023's implied ~Rp16,420 million - still a profit, just a smaller one, in the bank's seasonally slower first quarter (NIM^» and interest income both typically soften into January-March across this backfill's history).

The Prescription

Bank Jago should keep leaning into what actually worked this quarter: NPL^» fell to a new backfill-best 0.61% gross / 0.03% net, even lower than FY2023's already-strong 0.84%/0.05%, while the loan book grew 32% YoY - underwriting discipline holding at genuinely elite levels while the book keeps scaling. What it should get ahead of is treating deposit growth as an unlimited funding source for loan growth without a buffer: this quarter's near-exact offset between new loans and new deposits left almost nothing over for anything else, and a bank whose operating cash flow can swing to roughly zero the moment loan growth outpaces deposit growth for even one quarter shouldn't assume the two will always land in the same range. Building a modest cash cushion - or slowing loan origination slightly when deposit growth softens - would be a cheap insurance policy against a quarter where the mismatch runs the other way and doesn't reverse itself as quickly as this one likely will.

Key Financial Metrics

Q1 2024 vs. Q1 2023 - PT Bank Jago Tbk

FX: IDR 15,877 = USD 1 (28 March 2024 close, nearest trading day to period-end - 31 March 2024 was a Sunday and 29 March was a market holiday). The published statements for this period report the Bank on a standalone basis only - Bank Jago has no consolidated subsidiaries, consistent with every prior post in this backfill.

Metric	Q1 2024 (IDR)	Q1 2024 (USD)	Q1 2023 (IDR)	YoY
Net interest and Sharia income ("Net Revenue" equivalent)	Rp344,933M	~$21.73M	Rp422,726M	⚠️ -18.4%, driven by the Sharia unit's interest income collapsing 94% as its book winds down
Impairment losses on financial assets	-Rp52,808M	-~$3.33M	-Rp133,486M	✅ -60.4%, tracking the NPL improvement below
Operating income	Rp27,856M	~$1.75M	Rp14,953M	✅ +86.3%
Income before income tax	Rp27,831M	~$1.75M	Rp22,453M	✅ +23.9%
Income tax expense (current + deferred)	-Rp6,124M	-~$0.39M	-Rp4,949M	+23.8%, an expense both years
Net income for the period	Rp21,707M	~$1.37M	Rp17,504M	✅ +24.0% - see above for the conventional-vs-Sharia split
Earnings per share (full amount, basic and diluted)	Rp1.58	~$0.0001	Rp1.26	✅ +25.4%

Net cash flows generated from operating activities were Rp73,823 million (Q1 2023: Rp267,342 million), down sharply as loan growth nearly matched deposit growth in cash terms; capital expenditure (fixed and intangible assets acquired) was Rp217,441 million (Q1 2023: Rp170,467 million), against Rp3,090,019 million (~$194.65M) of period-end cash and cash equivalents. Operating income (the bank's own regulatory-format figure, netting impairment losses against revenue) is the closest bank equivalent to Adjusted EBITDA; the concept itself doesn't meaningfully apply to a deposit-taking institution.

Balance sheet metric	Mar 2024 (IDR)	Mar 2024 (USD)	Dec 2023 (IDR)	QoQ
Total Assets	Rp22,502,716M	~$1,417.32M	Rp21,295,840M	✅ +5.7%
Loans and Sharia financing (gross)	Rp14,272,497M	~$898.94M	Rp13,020,051M	✅ +9.6%
Total customer deposits (current, savings, time)	Rp13,195,628M	~$831.12M	Rp12,067,195M	✅ +9.4%
Total Liabilities	Rp14,115,418M	~$889.05M	Rp12,939,048M	+9.1%, tracking balance sheet growth
Total Equity	Rp8,387,298M	~$528.27M	Rp8,356,792M	+0.4%, still essentially flat

Net income up 24.0% YoY looks like a straightforward continuation of FY2023's turnaround, and mostly is. The number worth remembering is the one that doesn't show up in the income statement at all: operating cash flow fell 72.4% YoY to just Rp73,823 million, because the same loan growth generating that profit consumed almost every rupiah of new deposits the bank brought in. A bank can be more profitable and more cash-constrained in the same quarter - this was that quarter.

Key Operational Metrics

Ratios below are sourced from PT Bank Jago Tbk's own published financial ratios (31 March 2024 vs 31 March 2023) and its "1Q24 Results Update" investor presentation.

• CASA ratio^»: 62.7% (Mar 2024, calculated from Rp8,275,258M current + savings deposits ÷ Rp13,195,628M total deposits) vs. 65.3% (Dec 2023, per the FY2023 post) vs. 71% (Mar 2023, per the investor presentation) - a second straight quarter of decline from September 2023's 73.2% peak, as time deposits keep growing faster than CASA to fund loan growth; see The Prescription.
• Loan-to-Deposit Ratio^»: 108.05% (Mar 2024, per the bank's own filed ratios) vs. 107.77% (Dec 2023, per the FY2023 post) - essentially flat quarter-over-quarter.
• NIM^»: 7.45% (Mar 2024, per the bank's own filed ratios; the investor presentation rounds this to 7.5%) vs. 10.99% (Mar 2023) - a fifth straight quarter of decline; the investor presentation's quarterly progression now runs 11.0% (1Q23) → 10.0% (2Q23) → 9.0% (3Q23) → 8.0% (4Q23) → 7.5% (1Q24), an unbroken slide as the funding mix keeps shifting toward costlier time deposits.
• NPL^»: 0.61% gross / 0.03% net (Mar 2024, per the bank's own filed ratios) vs. 0.84%/0.05% (Dec 2023, per the FY2023 post) vs. 1.51%/0.33% (Mar 2023) - a new backfill-best for a fifth straight quarter running, even as the loan book grew 32% YoY.
• CAR^»: 55.02% (Mar 2024, per the bank's own filed ratios) vs. 61.77% (Dec 2023) vs. 78.72% (Mar 2023) - still falling every quarter as capital gets deployed into risk-weighted loans, now down to roughly 5.5x OJK's 10% minimum requirement.
• ROE^» / ROA^»: 1.29% / 0.51% (Mar 2024, per the bank's own filed ratios, annualized) vs. 0.97%/0.51% (Mar 2023) - ROE improved YoY while ROA held flat, both still far below what the stock's book-value premium (see Target Valuation Range) would imply is sustainable.
• Cost-to-Income^»: 80.10% (Mar 2024, per the bank's own filed ratios) vs. 72.31% (Dec 2023) vs. 67.12% (Mar 2023) - worse YoY, though an improvement on Q4 2023's 82% per the investor presentation's quarterly series (67% → 67% → 75% → 82% → 80%).
• Cost of Funds (period-end, per the investor presentation): 3.1% (Mar 2024) vs. 3.0% (Dec 2023) vs. 3.2% (Mar 2023) - up slightly for a second straight quarter as the deposit mix keeps shifting toward time deposits.
• Related-party loan concentration: approximately 4.00% of the gross loan book (Mar 2024, Rp565,271M against Rp14,118,441M gross loans, per the bank's own disclosed non-UMKM related-party loan balance) vs. 4.73% (Dec 2023, per the FY2023 post) - the ratio eased as the loan book's overall growth outpaced related-party lending growth; this quarter's filing doesn't disclose borrower-level names the way the FY2023 annual report did, so it isn't possible to confirm whether the same counterparties (PT Multifinance Anak Bangsa, BFI Finance Indonesia) still make up the balance.
• Undrawn loan commitments: Rp2,387,805M (Mar 2024: Rp1,333,367M committed + Rp1,054,438M uncommitted) vs. Rp2,523,137M (Dec 2023) - down 5.4%, the first quarterly decline in undrawn commitments recorded in this backfill, consistent with more of the committed pipeline actually converting into drawn loans this quarter.
• KYC-verified digital banking and lending customers: 11.1+ million (Mar 2024, per the investor presentation), up from 10.2 million at Dec 2023.
• Headcount and branch network: still not disclosed in the filed financial statements' regulatory format, continuing the pattern flagged in every prior post in this backfill back to 9M 2023.

The Sharia Unit's Profit Halved Even As Its Book Shrank Further

The Sharia Business Unit's financing book, which fell 80.5% over all of FY2023 to Rp428,551 million, kept shrinking: it stood at just Rp154,056 million at 31 March 2024, down 64.0% in a single quarter. The unit's own disclosed Financing to Deposit Ratio^» fell to 20.03%, from 167.17% a year earlier - a figure so low it barely resembles a lending business anymore.

What's new this quarter is what happened to the unit's profitability alongside that shrinkage. The Sharia Business Unit's own disclosed Q1 2024 net income was Rp14,114 million, down 60.1% YoY from Rp35,337 million in Q1 2023. That comparison matters more than it might look: Q1 2023's Rp35,337 million was itself close to the entire FY2023 Sharia net income of Rp35,002 million disclosed in the FY2023 post - meaning the other three quarters of 2023 combined (Q2 through Q4) netted to roughly negative Rp335 million for the Sharia unit, before it found its footing again in Q4. Q1 2024's Rp14,114 million is a real, positive profit, just a much smaller one than the unit posted in the same quarter a year ago, continuing the pattern of a unit that earns real money on a shrinking base rather than growing into anything.

The Stock Is Down 77% Over Two Years, Even After a Recovery Rally

Bank Jago's shares closed at approximately Rp2,670 on 28 March 2024 (the nearest trading day to period-end), down 7.9% from Rp2,900 three months earlier, but still up 10.3% YoY (from Rp2,420 at 31 March 2023). No stock split has occurred at any point since the company's IPO, so Rp2,670 is the actual nominal price quoted on the IDX at the time. Zooming out to the full two-year window this backfill tracks, the picture is far starker: the stock closed at Rp11,650 in April 2022 and has fallen 77.1% since, despite a sharp rally that took it from October 2023's backfill-low of Rp1,575 to Rp3,210 by January 2024 before pulling back to this quarter's Rp2,670 close. That two-year decline is well past the ~30-40% threshold this backfill uses to flag a move as worth its own section, and it's a useful corrective to reading Q1 2024's improving fundamentals as validation of where the stock currently sits - the market has already priced in a great deal of skepticism about this business over the full period, even as the most recent two quarters have been genuinely better than what preceded them.

Beyond the Usual

The document filed this quarter has none of the related-party or footnote detail the annual report carries

Bank Jago's quarterly published financial statements (the regulatory OJK-format filing this post is sourced from) disclose related-party lending only in aggregate - a Rp565,271 million balance in the earning-assets quality table, with no borrower names - and don't carry the commitments, purchase-obligation, or related-party-deposit footnote tables that the FY2023 annual report exposed (PT Multifinance Anak Bangsa's Rp299,983 million loan, the 9.4x increase in related-party time deposits). This is standard - interim quarterly filings across this backfill have consistently carried less footnote detail than annual reports - but it means this quarter's related-party lending and deposit trends can't be confirmed until the FY2024 annual report is available.

The Sharia unit's securities position kept growing even as its total assets grew for a second straight quarter

The FY2023 post noted that the Sharia unit's total assets grew even as its financing book collapsed, because proceeds were redirected into marketable securities rather than redeployed into new lending. That pattern continued: Sharia marketable securities reached Rp1,267,422 million at Mar 2024, up 29.3% from Rp980,243 million at Dec 2023, while total Sharia assets grew to Rp1,728,799 million (up 4.9% from Rp1,648,603 million) even as the financing book itself fell another 64.0% over the same quarter. The unit's balance sheet now looks less like a bank and more like a securities portfolio with a small legacy loan book attached.

Sharia asset quality deteriorated on a shrinking base

The Sharia unit's own disclosed non-performing financing ratio rose to 4.84% gross / 3.15% net at Mar 2024, up from 3.95%/1.50% a year earlier. On a financing book this small (Rp154,056 million), a fixed rupiah amount of non-performing exposure produces a much larger ratio than it would against the roughly 15x larger book the unit carried two years ago - the percentage move overstates how much genuinely new stress has entered the book, but it's a real reminder that a wind-down doesn't make credit risk on what remains disappear.

Target Valuation Range

Market cap Rp37.00 trillion (~$2.33 billion), ~4.41x P/B, ~422.5x P/E. Bottom line: still overvalued on both an earnings and a book basis, though marginally less so than three months ago - this quarter's price pullback outpaced the modest growth in book value, unlike Q4 2023's move in the opposite direction.

Bank Jago's shares closed at approximately Rp2,670 on 28 March 2024, down 7.9% from Rp2,900 three months earlier (see above). At 13,856,250,000 shares outstanding (unchanged since the March 2021 rights issue, confirmed by flat issued/paid-in capital of Rp1,385,625M this quarter), that implies a market capitalization of approximately Rp37.00 trillion (~$2.33 billion).

Market cap → book value	Q1 2024
Share price (period-end)	Rp2,670
Shares outstanding	13,856,250,000
Market capitalization	Rp37.00 trillion (~$2.33 billion)
Total equity (book value)	Rp8,387,298M
Book value per share	Rp605.30

Peer-multiple sanity check	Q4 2023	Q1 2024	Change
P/B	4.81x	4.41x	down
P/E	555.6x	422.5x	down

P/B^»: ~4.41x, using book value^» per share of Rp605.30 (Rp8,387,298M total equity ÷ 13,856,250,000 shares) - down from FY2023's ~4.81x, as the price decline this quarter outran the small (0.4%) growth in book value. P/E^»: annualizing Q1 2024's EPS of Rp1.58 (×4, since this is a single-quarter filing rather than a full-year report), the implied multiple is roughly 422.5x - a single quarter's earnings run-rate can't capture how much quarterly profit has swung across this backfill's history (Rp18-30 billion NPAT per quarter through 2023), so this figure should be read as directional, not precise. A full DCF still isn't appropriate, for the same reason every prior post in this backfill has given: this quarter's own numbers show a conventional bank that's swung from a loss to a profit YoY but pulled back from Q4 2023's pace, and a Sharia unit whose profit is now shrinking alongside its book rather than compounding. The peer-multiple read stays the honest one, and both multiples remain far above what a bank earning a sub-1.5% ROA^» would typically command - the stock's two-year, 77.1% decline reflects the market repricing that gap downward, not eliminating it.

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