Sign up | Log in



Home  >>   Daily News  >>Indonesia>>Finance>>Banks won’t up loan growth targets despite BI’s easing
NEW UPDATES Asean Affairs   24 February  2016  

Banks won’t up loan growth targets despite BI’s easing

Indonesia:The country’s major lenders have no plans to increase their loan growth this year, despite their access to extra funds following the central bank’s decision to cut the mandatory reserve requirement.

The lenders said they would stick to their initial business plans in anticipation of looming risks.

Bank Indonesia (BI) last week cut the benchmark interest rate by 25 basis points (bps) to 7 percent and lowered the primary reserve requirement (GWM) by 1 percent to 6.5 percent, aiming to encourage lenders to lower their interest rates and increase lending.

With the cut in the reserve requirement, BI expects additional liquidity amounting to Rp 34 trillion (US$2.51 billion) in the banking system, which banks could use to boost their lending for at least the next one to three months.

The extra liquidity is higher than the Rp 18 trillion injected into the system when the central bank first lowered its reserve requirement in November last year.

Major lenders such as Bank Mandiri, Bank Central Asia (BCA) and Bank Negara Indonesia (BNI) welcomed the policy.

Mandiri president director Budi Gunadi Sadikin, BCA president director Jahja Setiaatmadja and BNI president director Achmad Baiquni said the three lenders would see extra liquidity of Rp 4.1 trillion, Rp 3 trillion and Rp 2.7 trillion, respectively.

However, they do not plan to revise their loan growth targets in their 2016 business plans in consideration of the ongoing risks in the global and domestic economy.

“BI’s monetary easing can help us reduce our cost of funds, but we will retain our targets in accordance with our business plan, especially considering that BNI’s loan growth target is higher than the industry average,” Baiquni said last week.

BNI has set its loan growth target at between 15 and 17 percent this year, higher than the average 12 to 14 percent predicted by BI and the Financial Services Authority (OJK). In 2015, BNI disbursed Rp 326.1 trillion in loans, a 17.5 percent year-on-year increase.

A report published by ratings agency Standard & Poor’s (S&P) in February suggests Indonesian banks will continue to face tough operating conditions this year, marked by lower growth and higher credit stress.

S&P primary credit analyst Ivan Tan said in the report that the risk of higher credit stress in Indonesian banks this year was caused by the lingering impact of a 200 bps BI rate increase between 2013 and 2014, as well as slowdown in corporate activity and high growth in riskier segments amid a decelerating economy.

Last week, BI Deputy Governor Perry Warjiyo said the cuts in the key interest rate and reserve requirement, coupled with relaxation in the loan-to-value (LTV) ratio in June last year, would help banks increase their loans by up to 14 percent by the end of this year, higher than the prediction of 12.5 percent without a cut in the reserve requirement.

The prediction suggests the swing will be higher than the 10.5 percent posted in December last year.

Perry said BI’s optimism was also based on the government’s efforts to expedite spending in infrastructure and other sectors, which, in turn, would trigger confidence among private firms and demand for loans.

Reach Southeast Asia!
10- Nations, 560- Million Consumers
And $1 -Trillion Market
We are the Voice of Southeast Asia Media Kit
The only Media Dedicated to Southeast Asia Advertising Rates for Magazine
Online Ad Rates

Comment on this Article. Send them to

Letters that do not contain full contact information cannot be published.
Letters become the property of AseanAffairs and may be republished in any format.
They typically run 150 words or less and may be edited
submit your comment in the box below

Today's  Stories                           February 24, 2016 Subsribe Now !
• After record 60% in 2015 IPC sees slower 9% growth in 2016 Subcribe: Asean Affairs Global Magazine

• Industry welcomes new foreign investment ruling
• Developers ink master plan for central business district
Research Reports
on Thailand 2007-2008

• Textiles and Garments Industry
• Coffee industry
• Leather and footwear industry
• Shrimp industry

 • Banks won’t up loan growth targets despite BI’s easing
Foreign capital returns to Malaysia
Asean Analysis                   February 19, 2016
• Asean Analysis February 19, 2016
A Tumultuous 2016 in the South China Sea

• Asean Analysis February 19, 2016
Promoting inclusive economic integration: Skills mobility within ASEAN
Advertise Your Brand

Asean Stock Watch February  23, 2016
• Asean Stock Watch-February 23, 2016
The Biweekly Update
• The Biweekly Update February 19, 2016

ASEAN NEWS UPDATES      Updated: 04 January 2011

 • Women Shariah scholars see gender gap closing
• Bank Indonesia may hold key rate as inflation hits 7 percent
• Bursa Malaysia to revamp business rules
• Private property prices hit new high in Singapore • Bangkok moves on mass transport
• Thai retailers are upbeat
• Rice exports likely to decline • Vietnamese PM projects 10-year socioeconomic plan


This year in Thailand-what next?

AseanAffairs   04 January 2011
By David Swartzentruber      

It is commonplace in journalism to write two types of articles at the transition point between the year that has passed and the New Year. As this writer qualifies as an “old hand” in observing Thailand with a track record dating back 14 years, it is time take a shot at what may unfold in Thailand in 2011.

The first issue that can’t be answered is the health of Thailand’s beloved King Bhumibol, who is now 83 years old. He is the world's longest reigning monarch, but elaborate birthday celebrations in December failed to mask concern over his health. More






1.  Verifier

1. Verifier

For security purposes, we ask that you enter the security code that is shown in the graphic. Please enter the code exactly as it is shown in the graphic.
Your Code
Enter Code

Home | About Us | Contact Us | Special Feature | Features | News | Magazine | Events | TV | Press Release | Advertise With us

Our Products | Work with us | Terms of Use | Site Map | Privacy Policy | Refund Policy | Shipping/Delivery Policy | DISCLAIMER |

Version 5.0
Copyright © 2007-2015 TIME INTERNATIONAL MANAGEMENT ENTERPRISES CO., LTD. All rights reserved.
Bangkok, Thailand