Indonesia's private banks estimated loan growth in 2020 will be hard to reach more than 10 percent - Photo: Special.

JAKARTA (TheInsiderStories) – Indonesia’s private banks estimated loan growth in 2020 will be hard to reach more than 10 percent. It considered global economic slowdown which impacted the domestic economy, bankers said on Thursday (11/28).

PT Bank Central Asia Tbk (IDX: BBCA), the largest private Indonesia is one of the bank which set loan growth below 10 percent next year.

“Loan growth in 2020 is projected around 7.7-8 percent,” President Director BCA Jahja Setiaatmadja said.

He revealed the slowdown of the economy impacted the industry, so the demand for a loan turned to below. Setiaatmadja also explained, they were not able to boost the loan growth, because the bad loans would be increased.

Setiaatmadja continued, the slowdown of the economy has been shown in banking loan performance in January-September 2019 which only grew 3 percent, year to date (YTD). While BCA booked beyond that of 6 percent.

However, Setiaatmadja prefers to maintain the quality of loans to boost the loan without considering the risks. Therefore, they set a conservative target for 2020, while anticipating economy fluctuation and liquidity slowing.

“We keep the loan to deposit ratio (LDR) in range of 81 percent, we manage loan very careful, but once the economy recovers, we are ready to boost the loan,” he said.

Similar to BCA, PT Bank Pan Indonesia Tbk (IDX: PNBN) also set loan growth below 10 percent or 5-7 percent for 2010. President Director of Bank Panin Herwidayatmo said that the loan growth has not shown recovery signal, thus they set the conservative target for 2020.

They also maintain the nonperforming loan (NPL) in 2.61 percent. While the deposits growth was set higher than loan growth of 9-11 percent.

Another private bank, PT Bank CIMB Niaga Tbk (IDX: BNGA) also saw the economic slowdown will continue until next year. Therefore, Director of Sharia Banking Bank CIMB Niaga Pandji Djajanegara predicted the loan growth for next year will reach 7 percent.

Djajanegara explained the economic slowdown was caused by the slowing of commodities price. Moreover, they have to face liquidity matters.

“Therefore, we are doing the digital transformation to boost the funding need,” he said while projecting deposits growth for next year of 7.1 percent.

President Director of PT Bank Mega Tbk (IDX: MEGA) Kostaman Thayib also mentioned tight liquidity in the banking industry. It is caused the competition of deposits between banks and other instruments such as bonds which offered better yield and lower taxes.

The industry, he said, has faced the economic slowdown which impacted loan demand and increase of bad loans. As a result, margin income will be lower and impact to the net profit.

Bank Mega, he said will cooperate with CT Corporation, the parent company, to boost the acquisition of credit cards. They will also optimize digital technology to simplify the loan process and other businesses process.

Written by Staff Editor, Email: theinsiderstories@gmail.com