'Infobank' and 'SWA' ratings put bankers at odds<\/p>\n
JAKARTA (JP): Infobank and SWA business magazines have put
\nbankers at odds over their recent ratings on the country's 240
\ncommercial banks.<\/p>\n
Their different criteria and formulas in judging performance
\nmade the rating results quite different, and left bank clients
\nguessing which banks were really the best.<\/p>\n
In its rating, Infobank divided banks into three categories --
\nthe first category included banks with assets of over Rp 1
\ntrillion; the second included those with assets of between Rp 500
\nto Rp 1 trillion; and the third included banks with assets of
\nbelow Rp 500 billion.<\/p>\n
SWA also split the country's 240 banks into three categories
\n-- the first with assets of above Rp 10 trillion; the second with
\nassets of between Rp 1 trillion and Rp 10 trillion; and the third
\nwith assets of below Rp 1 trillion.<\/p>\n
The two magazines used different criteria in measuring the
\nsoundness of the banks, with Infobank focusing on their capital
\nasset ratios, net interest margins, returns on assets, returns on
\nequity and loan to deposit ratios.<\/p>\n
Unlike Infobank, which set its criteria close to Bank
\nIndonesia's prudential standards, SWA judged the soundness of
\nbanks' operations based on their performances in returns on risk
\nassets, net revenue from funds, fee-based incomes, capital
\nadequacy ratios, and loan to core deposit ratios.<\/p>\n
Banks' compliance to meet existing requirements on legal
\nlending limit, which was one of Infobank's important criteria in
\nmeasuring the banks' health, was not included in SWA's rating
\nstandards.<\/p>\n
The difference in the yardsticks in measuring the quality of
\nbanks' operations made the rating results quite unmatched.<\/p>\n
For example, state-owned Bank Negara Indonesia -- the largest
\nbank in the country in terms of assets -- which won SWA's fourth
\nslot in the category of banks with assets of above Rp 10
\ntrillion, was ranked far lower, at 32rd place, in the category of
\nbanks with assets of over Rp 1 trillion in the rating version of
\nInfobank.<\/p>\n
Bank Internasional Indonesia won the first rank in SWA's
\nrating for banks with assets of above Rp 10 trillion but it was
\nranked only in the 11th in Infobank's version.<\/p>\n
Both magazines claimed their formula as the best in assessing
\nthe performances of banks in cooperation with experts.<\/p>\n
The SWA magazine, for example, cooperated with noted banking
\nanalyst Laksamana Sukardi, former executive director of Lippo
\nBank, in its rating activities to ensure that the rating results
\nreflected the actual performances of the banks under review.<\/p>\n
Sujatmaka, a SWA editor who was in charge of the rating
\nprocess, said that the magazine preferred using its own criteria
\nso that the results would not only reflect the quantity of the
\nbank performances but also possible risks that might encounter
\nbanks in the future.<\/p>\n
Neither Infobank or SWA included the management aspect in
\ntheir assessments.<\/p>\n
Analysts mostly hailed the two magazines' rating activities,
\ndescribing them as a breakthrough in giving more information to
\nthe public about the country's banking industry.<\/p>\n
But many bankers narrowed their eyes, saying that the rating
\nresults did not really reflect the real condition of the banks
\nassessed by the two magazines. Most of their objections were on
\nthe way the two magazines classified the banks.<\/p>\n
Rosmiati Solihin of Panin Bank said that the classification
\nwould be better based on the market segments rather than on the
\nsize of their assets.<\/p>\n
She cited that foreign joint-venture banks, which have
\ndifferent market segments with purely local banks, should not be
\nplaced in the same category as domestic banks.<\/p>\n
Other bankers said that placing banks owned by provincial
\nadministrations in the same group with ordinary banks was also
\ninappropriate.<\/p>\n
Unlike ordinary banks, banks owned by provincial
\nadministrations, such as Bank DKI, mostly have cheaper funding
\nsources due to the fact that most of them often act as the
\ntreasurer of provincial administrations. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/infobank-and-swa-ratings-put-bankers-at-odds-1447893297",
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