State banks cut lending despite excess funds<\/p>\n
JAKARTA (JP): The country's six state banks significantly
\nreduced their lending activities in the first semester of this
\nyear amid growing public scrutiny of their bad loan problems.<\/p>\n
A Bank Indonesia report shows that their lending portfolios
\nincreased only by three percent to Rp 73.98 trillion (US$35.22
\nmillion) as of May from Rp 71.76 billion as of last December.<\/p>\n
In contrast, private commercial banks recorded a 15 percent
\nincrease in the same period.<\/p>\n
State bank lending accounts for around 45 percent of total
\nbanking credit.<\/p>\n
Banking analysts attributed the slow lending expansion of the
\nstate banks to their stricter loan policies.<\/p>\n
Winarto Sumarno, the president of Bank Negara Indonesia (BNI),
\nacknowledged that state banks were mostly in excess of funds. He
\nsaid the slow lending growth was the direct consequence of the
\nstate banks' stricter policies in managing their credit
\nportfolios.<\/p>\n
He denied that the slow lending expansion was caused by the
\nuproar over the bad debt problems, which have hurt a number of
\nstate banks in the past two years.<\/p>\n
Bank Indonesia, the central bank, reports that the non-
\nperforming loans (including bad and doubtful loans) of state
\nbanks reached a total of Rp 14.97 trillion ($7.12 billion) as of
\nOctober last year. This accounts for 21 percent of their total
\noutstanding loans.<\/p>\n
Settlements<\/p>\n
He also said that the excess of funds was not due to \"cash
\ndebt settlements\".<\/p>\n
Winarto acknowledged that many big borrowers had settled their
\nloans earlier than their maturity periods, but said that \"this
\ncash payment\" did not cause a problem for bank liquidity.<\/p>\n
Many prime lenders, including Gemala Group and Indah Kiat,
\nwere reported to have settled their loans of around US$300
\nmillion and $500 million, respectively, with Bank Bumi Daya (BBD)
\nand Bank Rakyat Indonesia (BRI), much earlier than their maturity
\nperiods required.<\/p>\n
Winarto said that in terms of annual figures, the loan
\nexpansion of state-owned banks was not too low even though the
\ngrowth was still lower than the 20 percent increase projected by
\nthe government.<\/p>\n
According to their published half-yearly reports, BNI recorded
\nan increase of 12.45 percent in its lending to Rp 18.45 trillion
\n($8.78 billion) as of June this year from Rp 16.41 trillion as of
\nJune of 1993. Bank Dagang Negara (BDN) booked an increase of
\n19.42 percent, Bank Tabungan Negara (BTN) 56.18 percent, Bank
\nPembangunan Indonesia (Bapindo) 56.45 percent, Bank Ekspor Impor
\n7.77 percent and Bank Bumi Daya (BBD) 2.27 percent, while the
\npreviously most aggressive Bank Rakyat Indonesia (BRI) recorded a
\ndrop of 1.25 percent.<\/p>\n
BTN was the most profitable during the first semester, with
\nits profits rising by around 326 percent to Rp 78.23 billion,
\nwhile BNI's profits increased only by around 7.31 percent to Rp
\n155.40 billion.<\/p>\n
BDN recorded a 26.33 percent increase in profits to Rp 113.47
\nbillion, BRI 78.9 percent to Rp 81.45 billion, BBD 2.84 percent
\nto Rp 72.16 billion and Bank Ekspor Impor 22.64 percent to Rp
\n92.72 billion, while the debt-ridden Bapindo posted a 73.51
\npercent decline in profit to Rp 8.9 billion. (hen)<\/p>",
"url": "https:\/\/jawawa.id\/newsitem\/state-banks-cut-lending-despite-excess-funds-1447893297",
"image": ""
},
"sponsor": "Okusi Associates",
"sponsor_url": "https:\/\/okusiassociates.com"
}