Bank loans increased in Q3: BI<\/p>\n
The Jakarta Post, Jakarta<\/p>\n
The country's commercial banks continued to increase new loan
\ndisbursements in the third quarter of the year, as improving
\neconomic conditions have made lending more profitable, according
\nto a central bank survey of 50 banks.<\/p>\n
Bank Indonesia data on its website shows that approved fresh
\nbank loans in the third quarter grew by 55.3 percent from the
\nsame period last year, although the growth rate was slower than
\nthe previous quarter's 69.1 percent.<\/p>\n
But the central bank expected new bank loans to increase by
\nnearly 59 percent in the fourth quarter.<\/p>\n
The survey revealed that a huge portion of the approved loans
\nduring the third quarter period were for working capital (72.3
\npercent), consumer loans (19.2 percent) and for investment (8.5
\npercent).<\/p>\n
It added that the lending growth mostly occurred in the large
\nbank category, as medium-sized banks and smaller banks saw a
\ndecline in new loans.<\/p>\n
Bank Indonesia, for the past couple of years, has been guiding
\ndown the domestic interest rate in a bid to make bank loans more
\naffordable and increase bank lending to help push economic growth
\nhigher.<\/p>\n
But while the central bank benchmark rate is now at a record
\nlow of around 7.41 percent, there has been criticism recently
\nthat many banks, which have started to recover from the impact of
\nthe late 1990's financial crisis, remain reluctant to boost
\nlending to the corporate sector amid slow progress in the
\nrestructuring of corporate debts. This is reflected in the fact
\nthat the banking sector's loan to deposit ratio of less than 50
\npercent is still far from the pre-crisis level of around 80
\npercent.<\/p>\n
Elsewhere, the survey also revealed that demand for loans
\nincreased during the third quarter, and is expected to continue
\nto increase in the fourth quarter amid a low interest rate
\nenvironment. The loans will be used for working capital (86.4
\npercent), investment (2.2 percent), and consumption (11.4
\npercent), mostly for the purchase of housing and automotive
\nvehicles.<\/p>\n
The central bank also said the average interest rate that
\nbanks charged for loans in a bid to supplement working capital
\ndropped to 14.1 percent in the third quarter from 14.5 percent in
\nthe second quarter.<\/p>\n
Bank Indonesia predicted the rate would fall further to around
\n13.8 percent in the fourth quarter.<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bank-loans-increased-in-q3-bi-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}