BI reports Rp 15.1t in new lending<\/p>\n
JAKARTA (JP): Bank Indonesia said Thursday that new lending
\nthrough September reached about Rp 15.1 trillion (US$1.59
\nbillion).<\/p>\n
Bank Indonesia director for banking supervision Djoko Sarwono
\nsaid that the new lending had been mostly channeled to the
\nindustrial, trade, and consumption sectors.<\/p>\n
\"We believe that new lending will continue to grow through the
\nend of the year,\" Djoko told reporters at a fast-breaking
\ngathering.<\/p>\n
Indonesia's economy has been plagued by stagnant credit since
\nthe country's banking sector began reforms following the economic
\ncrisis.<\/p>\n
New lending only started in July at a volume of more than Rp
\n7.13 trillion.<\/p>\n
Djoko said that outstanding bank loans as of end of September
\ntotaled Rp 280.6 trillion, small compared to total third party
\nfunds of Rp 652 trillion.<\/p>\n
Many banks have feared to extend new loans due to various
\nreasons including the high risk associated with the real sector.<\/p>\n
But Djoko said that although banks had not channeled their
\nmoney into credit, they have managed to make profits.<\/p>\n
He said that operational profit jumped to Rp 3.6 trillion in
\nthe third quarter compared to a loss of Rp 8.1 trillion and Rp
\n500 billion in the second and first quarter, respectively.<\/p>\n
He said that the turn around in the banks' profitability was
\nbasically due to the increase in net interest margin from Rp 3.1
\ntrillion in the first quarter to Rp 4.8 trillion in the second
\nquarter and Rp 6.3 trillion in the third quarter.<\/p>\n
Djoko admitted that the rise in the net interest margin was
\nlargely contributed by the huge amount of government bonds in the
\nbank's portfolio.<\/p>\n
The government completed the country's costly bank
\nrecapitalization program in late October by issuing Rp 430.4
\ntrillion worth of bonds to 27 banks including four state-owned
\nbanks and 12 regional development banks. The recapitalization
\nprogram boosted the capital adequacy ratio of the banks to more
\nthan 4 percent.<\/p>\n
The banks enjoyed interest rate revenue from bonds injected by
\nthe government.<\/p>\n
Djoko said that after the recapitalization program, the banks'
\ncapital had jumped from Rp 6 trillion in the second quarter to Rp
\n31.8 trillion at the end of September.<\/p>\n
He said that the level of non-performing loans had gradually
\ndeclined to 27.9 percent from 30 percent in the second quarter
\nand 32.1 percent in the first quarter.<\/p>\n
Djoko said that about Rp 54.1 trillion in non-performing loans
\n(NPL) had been restructured by the banks as of end of September.<\/p>\n
All of the bad loans of the recapitalized banks, estimated at
\naround Rp 260 trillion, have been transferred to the Indonesian
\nBank Restructuring Agency (IBRA).<\/p>\n
The remaining NPLs held by the banks are those under the
\ncategory of doubtful or special mention loans.<\/p>\n
Domestic banks are required to have an NPL level of below five
\npercent and minimum CAR level of 8 percent by the end of 2001.
\n(rei)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/bi-reports-rp-151t-in-new-lending-1447893297",
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