REPUBLIKA.CO.ID, JAKARTA- Deputy Governor of Bank Indonesia Erwin Rijanto has said bank credits in the first quarter of this were estimated to grow nine percent year-on-year.

In the first three months of the year, the third party funds held by banks were estimated to grow eight percent (yoy), Erwin said here on Friday. 

The growth rates in the three month period was relatively slow but not far from the projection, he added. 

Demand for credits was still weak as the economic activities and spending by the government have not grown as expected, he said. 

Data from the Central Bank showed that credits declined 0.7 percent yoy in the January-March period this year.

Senior Deputy Governor of Bank Indonesia Mirza Adityaswara said he was convinced that credit would grow faster in the second half of the year with the economy beginning to revive. 

In addition, banks have stronger liquidity with the fund from repatriation under the tax amnesty program. Repatriation under the tax amnesty program which ended last month was estimated to reach Rp145 trillion. 

The slowdown in credit expansion was also caused by growing non performing loan (NPL). By the end of February 2017, banks recorded an increase in NPL to 3.16 percent from 2.9 percent in December, 2016.

However, Mirza said he was convinced the performance of the banking industry would not be hampered by the high NPL as the banking industry has adequate reserve especially with the relatively strong Capital Adequacy Ratio (CAR).

"Bank reserves are quite strong to protect banking operation from the impact of NPL. The CAR is also relatively high," he added. 

Mirza said banks of categories (BUKU) I up to BUKU IV recorded quite healthy capital, as indicated by the CAR average of more than 20 percent

Ikuti Whatsapp Channel Republika