Why Bank Negara Indonesia has the weakest asset quality versus peers

NPL dropped sharply in 2008.

According to Moody's Investor Service, among the top four, Bank Central Asia stands out with the strongest asset quality, which is one of the factors for considering Bank Central Asia as having the strongest combination of fundamental factors, although its significant holdings of government securities and its concentration on the Indonesian economy (from where it generates close to 100% of its earnings) makes its credit quality highly correlated to the government’s own rating, which is currently constraining its ratings. 

Here's more from Moody's Investor Service:

Bank Central Asia’s very strong credit quality in the recent five years reflects the bank’s disciplined approach to approving and monitoring loans, and its high quality corporate and mid-to-high income clientele base.

In contrast, BNI has the weakest asset quality. Nevertheless, its non-performing loans have fallen sharply from their five-year peak at end-2008.

The key weakness resides in its lending to small- and medium-sized enterprises (SME), which accounted for 28.8% of total loans at endJune 2013 with a 5.0% non-performing loan ratio for the medium segment and 5.5% for the small segment. 

As for Bank Mandiri, it has exhibited significant asset quality improvement in recent years, but there is still room for it to narrow the gap between Bank Central Asia as well as BRI in terms of “adjusted non-performing loans” (adjusted NPL) – which incorporates restructured loans that are classified as performing - and taking into account loan loss reserve ratios (Exhibits 3 and 4).