Bad loans at state banks rise by $137m in two months
Bad loans at state banks rise by $137m in two months
JAKARTA (JP): Bad loans at the country's seven state banks
increased by Rp 313 billion (US$137.7 million) within the April-
June period of this year, Governor of Bank Indonesia J.
Soedradjad Djiwandono disclosed yesterday.
Soedradjad said at a hearing with the Budget Commission of the
House of Representatives that bad loans at the state banks
increased to Rp 7.316 trillion as of last June, from Rp 7.003
trillion as of April.
The seven state banks are Bank Bumi Daya, Bank Dagang Negara,
Bank Ekspor Impor Indonesia, Bank Negara Indonesia, Bank
Pembangunan Indonesia, Bank Rakyat Indonesia and Bank Tabungan
Negara.
Soedradjad said bad loans at the state banks account for 73.4
percent of the total bad loans at all of the country's commercial
banks, which as of June stood at Rp 9.97 trillion, or 4.16
percent of their outstanding credits, up from Rp 9.78 trillion,
or 4.24 percent of the outstanding credits as of April.
He added that bad loans at provincial development banks
increased to Rp 533 billion as of last June, from Rp 515 billion
as of April.
Bad loans at domestic private commercial banks, however,
decreased slightly to Rp 1.668 trillion as of last June from Rp
1.795 trillion as of April, while bad loans at foreign-owned and
joint-venture banks declined to Rp 454 billion from Rp 468
billion.
In dealing with bad loans, Soedradjad said Bank Indonesia, the
central bank, focuses on solving its current bad loans first.
Attention is then given to other banks suffering from bad loans
and the prevention of future bad loans. Guidelines are then
introduced to formulate credit policies and standard internal
audits for commercial banks.
"I cannot yet report the results of our efforts to deal with
bad loans because the credit policy guidelines and internal audit
policy we issued last March will come into effect in January next
year," Soedradjad told the hearing.
He said those efforts are expected to reduce the emergence of
new bad loans. "Our bad loans in the future will decline further
not only because of the decrease in existing bad loans but also
from the avoidance of new bad loans."
Despite the increase in bad loans, Soedradjad said problem and
doubtful loans at all commercial banks had decreased accordingly.
Problem loans as of June fell to Rp 5.7 trillion, or 2.38 percent
of their outstanding credits, from Rp 5.95 trillion, or 2.58
percent of outstanding credits as of April.
Doubtful loans at commercial banks as of June shrank to Rp
12.19 trillion, or 5.09 percent of outstanding credits, from Rp
12.51 trillion, or 5.41 percent of outstanding credits as of
April.
Meanwhile, the collectibility rate of loans provided by
commercial banks increased to 88.37 percent of outstanding
credits as of June, from 87.77 percent as of April. (rid)