JAKARTA (TheInsiderStories) – Bank Indonesia (BI) indicated the national loan growth slowing down in the third quarter (3Q) of 2019, it said in a banking survey released today (10/16). But, the central bank optimistic the Loan growth will rebound in the 4Q of 2019.
An indication of loan growth sag in the 3Q of 2019 was reflected in the weighted net balance of new loan demand until September at 68.3 percent, lower than 78.3 percent in the previous quarter. Based on the type of usage, the slowdown mainly came from investment and consumption loans.
But, Bi believed, in the 4Q of 2019, the loan growth is expected to increase. This was driven by optimism about the strengthening monetary and economic conditions and also the risk of lending that was relatively well maintained.
In line with forecasts, the lending policy in the 4Q of 2019 is expected to be more relaxed. This is shown by the Lending Standard Index at 11.8 percent, or slightly lower than 12 percent in the previous quarter.
Lending standards will primarily be made towards housing or apartment ownership, investment and small medium enterprises loans, by loosening the loan ceiling, interest rates and collateral. The survey also indicated a slowdown in loan growth for the whole of 2019.
Loan is expected to grow 9.7 percent compared to last year (YoY), or lower than the previous quarter’ forecast or the previous year’ realization rose 12.88 percent.
BI’ governor Perry Warjiyo has explained that financial system stability was maintained, accompanied by controlled loan risk and the continuing intermediation function. It was reflected in the banking capital adequacy ratio in July 2019, which was at 23.1 percent, and non performing loans which remained low at 2.6 percent (gross) or 1.2 percent (net).
He realized the loan growth in July was slowdown, from 9.9 percent in June to 9.6 percent in July, mainly influenced by the limited demand for corporate loan. While the growth of deposits in July amounted to 8 percent from June grow 7.4 percent.
Bank Indonesia views the mix of accommodative monetary and macro-prudential policies could encourage loan growth without disrupting financial system stability.
The central bank expects bank loan growth to be in the range of 10-12 percent in 2019 and 11-13 percent in 2020. While deposits is predicted to be in the range of 7-9 percent in 2019 and 8-10 percent in 2020.
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