Economists Call Indonesian Banking Performance Show Positive Trends

Illustration of the Rupiah (Photo: Doc. Antara)

JAKARTA - Bank Mandiri Chief Economist Andry Asmoro said the Indonesian banking sector was still showing a positive trend, although it was starting to be moderated.

"Credit growth in June 2023 recorded a growth of 7.76 percent or a slowdown compared to the end of the first quarter of 2023 of 9.9 percent," Andry said in Bank Mandiri Media Gathering, Tuesday, August 22.

On the other hand, Andry continued, the growth of third party funds also continued to slow down, reaching 5.79 percent in June in line with the behavior of customers returning to using their funds for consumption or investment.

However, Andry said that banking liquidity in general is still quite adequate, effective from the Loan to Deposit (LDR) ratio which is still at 82 percent.

"The government and Bank Indonesia also continue to issue accommodative policies for the banking economy and sector," Andry continued.

He further added that the repatriation policy of Export Result Foreign Exchange (DHE) is expected to support financial system liquidity and support overall economic growth.

"Bank Indonesia also indicates credit growth in 2023 will reach around 9 11 percent. I believe that banks will always maintain the quality profile of their assets even though credit growth is starting to be moderated," added Andry.

Just so you know, Bank Mandiri also encourages economic growth by actively disbursing financing. Bank Mandiri managed to channel credit on a consolidated basis, growing 11.8 percent yoy to reach Rp1,272.07 trillion.

This credit growth is far above the growth of the banking industry in June 2023 by 7.8 percent yoy. This credit growth coincides with the company's increasingly solid financial performance.

Reflecting on Bank Mandiri's consolidated net profit, it shot up 24.9 percent yoy to IDR 25.2 trillion as of June 2023.

Bank Mandiri's performance can also be seen in terms of profitability which continues to increase. The return on Equity (ROE) Tier-1 bank only touched 25.8 percent or an increase of 275 basis points (bps) yoy. Meanwhile, the net interest margin (NIM) position of bank only is solidly maintained at the level of 5.30 percent.

Bank Mandiri has also implemented three pillars of environmental value implementation (environmental), social (social), and governance or ESG. As a result, until June 2023 Bank Mandiri has distributed a sustainable portfolio of IDR 242 trillion. From this portfolio, the special portion for green portfolio is IDR 115 trillion or 11.7 percent of Bank Mandiri's total credit portfolio.

"The challenges ahead will not decrease compared to this year, but we believe that in the midst of volatility there is always opportunity," concluded Andry.