JAKARTA: Bank Indonesia estimated the banking sector in 2012 would grow at just about the same pace as last year’s, despite three major lenders has revealed projection of lower credit expansion.
The central bank expected credit portfolio to grow by around 25%, according to Deputy Governor of Bank Indonesia (BI) Muliaman Darmansyah Hadad.
“Assuming a GDP growth of 6.7%, the industry would enjoy the same growth as last year. The economic growth will boost loans, so credit growth would more or less be the same with what we had in 2011, which was about 25%,” he said Monday.
Such projection depends on macroeconomic conditions and how the government along with business people takes the maximum benefits of the recent rating upgrade of the country.
The central bank’s prediction is relatively higher than the target set by some major banks. PT Bank Central Asia Tbk, for example, expected a credit growth of 20%-22%.
“We set a conservative growth this year, despite the 30% growth in 2011. However, we always set the initial prediction at 20%-22%. I don’t want to let investor down,” said BCA President Director Jahja Setiaatmadja.
State-controlled PT Bank Mandiri Tbk and PT Bank Rakyat Indonesia Tbk have earlier estimated that their growth will be around 20%-22%, considering the impacts of European crisis. Mandiri, BRI and BCA are key players in the country’s banking industry with 33% market share.
Provided the GDP growth of 6.7% in 2012, Jahja predicted that there would be higher demand for working capital. Thus, banks must be well prepared to prevent lack of liquidity when needed.
With such prediction, BCA has prepared a provision, called unused facility, amounted to IDR70 trillion that can be withdrawn anytime.
According to Muliaman, special preparation would not be necessary this year since there has been no problem in liquidity.
He declined to explain in details about bank’s business plan this year because it is still in discussion. He affirmed however that Bank Indonesia would be stricter in evaluating bank business plan.
Rural banks
In the meantime, rural banks are struggling to increase loan-to-deposit ratio (LDR) in the range of 60%-70% in 2012. If the ratio is too low, banks may not be earning as much as they could be.
Association of Rural Banks (Asbanda) mentioned that the prediction is higher than the average LDR of between 50% and 60% last year, said Chairperson Winny Erwindia.
“Rural banks generally have a low LDR since they have some kind of pooling fund as a treasury which can be utilized if there is a liquidity problem,” she said Monday.
According to her, the main activity of rural banks is to collect fund through provincial government budget. However at present, rural banks are also urged to collect fund from the people just like the commercial banks do.
Thus, Winny added that rural banks would focus on low-cost fund, which can collect funds from the people using small interest rate. This kind of fund includes savings, such as TabunganKu product. (t04/ags)
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