JAKARTA (TheInsiderStories) – Bank Indonesia (BI) revised down the loan growth from 7 – 9 percent to 5 – 7 percent in this year amidst the economic slowdown due to the pandemic that hit the industry since last year. Data from the central bank, in January 2021, the loan growth still contracted 1.92 percent in annual basis (YoY) and at the end of 2020 minus 2.41 percent.
The projection is a little more pessimistic than the bank business plan that has been submitted to the Financial Services Authority (FSA). According to the chairman, Wimboh Santoso, the banks are targeting the credit could grow by 7.13 percent in this year. This optimism was born from the increasing credit in 2020.
The data showed state-owned loans still grew 0.63 percent, followed by the regional banks arise by 5.22 percent, and Islamic banks increased by 9.5 percent. But, he rated, although there are many positive sentiments that will encourage economic recovery the credit growth has not yet in normal conditions.
He emphasized that this target could only be achieved if there were no shocking news and no new wave of the COVID-19 case. According to him, sources of future growth will still be driven by consumption. On the liquidity side, Santoso projected that the collection of third party funds of national banks will grow by around 11 – 12 percent in 2021.
Interpreting the regulators projection, president director of PT Bank Central Asia Tbk (IDX: BBCA) targeting the loans to grow by around 4 – 6 percent, assuming the government’ target of vaccinating 100 million Indonesians can be achieved by June 2021. But if the vaccination program is delayed and the economy is still as it is now, the projection of credit disbursement may be just below 4 percent, he adds.
While, finance director PT Bank Rakyat Indonesia Tbk (IDX: BBRI), Haru Koesmahargyo is targeting their loans to grow by around 6 percent in annual basis. The state lender will maintain the composition of small and medium enterprises credit at least 80 percent of the total outstanding loans of the company.
Then, PT Bank Mandiri Tbk (IDX: BMRI), projected that the loan growth will be in line with industrial growth, which is around 5 percent. According to the director, Panji Irawan, the credit growth in 2021 will be driven more by market confidence in the improving economic conditions.
Earlier, FSA has announced that the regulator can force Indonesian banks to consolidate, merging or other steps to maintain financial stability amid the COVID-19. In addition, written orders are given to lenders that meet the criteria based on FSA assessments. There are also some adjustments to the process of merging, consolidation, acquisition, or integration of the lenders, said the agency.
For conventional and Islamic banks, it can be excluded from the provisions regarding sole ownership in Indonesian banks, ownership of commercial bank shares, and/or deadline for fulfilling minimum core capital. Then, for rural bank and Islamic people’ financing banks or branch offices can still be maintained in accordance with the office network area that has been established.
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