Local private banks extend more loans than state banks<\/p>\n
JAKARTA (JP): Loans provided by private domestic banks during
\nthe first quarter of this year increased by 6.95 percent, far
\nhigher than the 2.65 percent growth of loans provided by state
\nbanks in the same period.<\/p>\n
According to a weekly report by Bank Indonesia, outstanding
\nloans provided by private domestic banks increased by 6.95
\npercent to Rp 64.61 trillion (US$29.91 billion) as of the end of
\nMarch and from Rp 60.41 trillion as of the end of last year.<\/p>\n
In comparison, credits extended by state banks increased by
\n2.65 percent to Rp 73.66 trillion from Rp 71.76 trillion in the
\nsame period.<\/p>\n
Foreign banks operating in Indonesia recorded a 4.30 percent
\nincrease in credits to Rp 12.12 trillion from Rp 11.61 trillion,
\nwhile provincial development banks noted a 0.84 percent decrease
\nto Rp 3.52 trillion from Rp 3.55 trillion.<\/p>\n
The report shows that overall banking credits within the first
\nquarter of this year only noted a 3.28 percent increase.<\/p>\n
A banking observer, Rijanto Sastroatmodjo, said the decrease
\nin credit growth at state banks was not caused by rumors about
\nincreases in problem loans but was mainly caused by internal
\nproblems in the banks themselves.<\/p>\n
Rijanto said consolidation programs in the state banks have
\nalso caused them to hold back their credit expansion.<\/p>\n
However, Rijanto is pessimistic that the government's total
\ncredit expansion prediction of 18 percent will likely be achieved
\nduring this fiscal year.<\/p>\n
\"The figures indicate that the state banks' role in financing
\ndevelopment programs has been replaced by private domestic
\nbanks.\" Rijanto was quoted by Bisnis Indonesia daily as saying.<\/p>\n
Deposits<\/p>\n
Bank Indonesia's weekly report also shows that the funds
\ngenerated by state banks and provincial development banks in the
\nforms of deposits and other kinds of savings during the first
\nquarter dropped by 3.77 percent and 3.35 percent respectively.<\/p>\n
The funds generated by state banks decreased from Rp 61.68
\ntrillion as of the end of last year to Rp 59.35 trillion as of
\nthe end of March and those by provincial development banks from
\n4.77 trillion to Rp 4.61 trillion.<\/p>\n
Meanwhile, both private domestic banks and foreign banks
\noperating in Indonesia reported increases in their generation of
\nfunds. Private domestic banks recorded a 6.21 percent increase
\nfrom Rp 67.39 trillion to Rp 71.58 trillion and foreign banks a
\n1.48 percent increase from Rp 8.09 trillion to Rp 8.21 trillion.<\/p>\n
Rijanto said the decrease of the fund collection in state
\nbanks was caused by the low interest rates they offer.<\/p>\n
\"State banks, whose capital adequacy ratios (CAR) are low,
\nbelieve that there is no reason to generate excessively large
\namounts of funds if they cannot channel them for credits,\"
\nRijanto said.<\/p>\n
He said private domestic banks can offer higher interest rates
\nbecause their CARs are at convenient levels, about nine percent
\nto 15 percent.<\/p>\n
The government has required commercial banks to maintain their
\nCARs at eight percent by the end of this year.(02)<\/p>",
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