Financial Service Authority (FSA) postponed the implementation of Basel III for Indonesian Bank. as part of the agency' stimulus for the financial sectors - Photo: Privacy
JAKARTA (TheInsiderStories) – Indonesian Banking Survey estimates that loan growth could slow down in the first quarter (1Q) of 2019, said the central bank in the latest report. This, in line with the pattern of limited customer financing needs at the beginning of the year.
Its also reflected in the Lending Standard Index of 14.6 percent, or higher than -1.4 percent in the previous quarter. Tightening of lending will mainly be carried out on investment loans, working capital loans, credit agreements with customers, administrative requirements, loan approval fees, and the period of credit granted will be more relaxed in the 1Q of 2019.
The survey also showed that the Weighted Net Balance (WNB) of loan demand in the 1Q of 2019 is predicted only reached 50 percent, lower than 4Q of 2018 at 71.7 percent. While overall 2019, consumers are more optimistic about loan growth.
Respondents predicted the credit growth in 2019 will reach 12.2 percent. This optimism was driven by the forecast for economic growth which remained good in 2019 and the bank’ capital adequacy ratio increased.
Furthermore, the growth of deposits is also expected to slow down in the 1Q of 2019. This is reflected in WNB deposits growth of 53.1 percent, lower than the previous quarter which reached 91.7 percent. The slowdown occurred in all instruments with the lowest WNB at the 30.6 percent demand deposit instrument.
While overall in 2019, growth in deposits is expected to increase. This is indicated by the WNB of 2019 deposits growth of 92.2 percent, slightly higher than 91.7 percent from the previous month.
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