OJK: Credit is still contracting, but there are signs of improvement

Bank credit is still in the contraction zone of 3.77% year on year because this is due to the high base effect of the same period the previous year …

Jakarta (medialnews) – Financial Services Authority (OJK) Council of Commissioners Chairman Wimboh Santoso said industrial bank credit still contracts every year in the first quarter of 2021, but the credit position throughout year round and on a monthly basis shows signs of improvement.

“Bank credit is still in the 3.77% contraction zone from year to year because this is caused base effect which is high over the same period in the previous year, so the comparator is a high comparator. But there are signs of improvement as we see growth has been positive Month after month amounting to 1.43 percent and if you look at the face amount it equals IDR 70 trillion or increases by year to date 0.27%, ”Wimboh said at a Financial System Stability Committee (KSSK) online press conference in Jakarta on Monday.

Wimboh hopes that bank lending will continue to grow positively in the coming months. According to Wimboh, this also cannot be separated from the joint efforts between the government and financial authorities that were released earlier this year to encourage public consumption.

Read also: OJK: the distribution of bank credit has started to increase

He said that the prudential ratio of the financial sector is still relatively well maintained in a stable state. Until March 2021, banks still have a high capitalization with a capital adequacy ratio (RCA) at the level of 24.18% and gear ratio the financing sector at 2.03 levels and the risk-based capital (RBC) of the life insurance and general insurance sectors respectively well above the minimum threshold.

The adequacy of bank liquidity, continued Wimboh, is also well maintained as evidenced by the indicators of liquidity / non-essential deposits or AL / NCD and liquidity / deposits at April 21, 2021, amounting respectively to 162.9% and 35.17%. is well above the minimum threshold. At the same time, TPF continued to post strong growth, at 9.5% (year-on-year).

Read also: Governor of the BI: The fall in bank lending rates must be encouraged

Meanwhile, credit risk or NPL gross improved to 3.17 percent from the previous month. On the other hand, the co-financing or MFN of finance companies also improved to reach a level of 3.74%.

Wimboh stressed that the OJK will continue to focus on strengthening integrated supervision and supervision in order to detect potential risks to the stability of the financial system.

“The OJK will also continue to push for policy measures that can simultaneously accelerate economic growth. preemptive and looking to the future to help more comprehensively accelerate growth in the real sector as well as the economy as a whole, as well as to maintain the momentum to strengthen our economy, ”said Wimboh.

Also Read: OJK President Said Bank Credit Restructuring Slowing Down

Journalist: Citro Atmoko
Editor: Risbiani Fardaniah

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