OJK Claims That The Financial Services Sector Will Be Maintained Until The End Of The Year

JAKARTA - The Financial Services Authority (OJK) reports that until the end of the 2021 period the financial services sector is in a well-maintained condition. This was conveyed by the authority through the Deputy Commissioner for Public Relations and Logistics Anto Prabowo in an official statement today.

It was stated that the banking intermediation and fund-raising functions in the capital market continued to improve, driven by the control of the COVID-19 pandemic.

"This is also supported by the recovery in mobility and increased economic activity," said Anto, Thursday, December 30.

According to him, fund raising in the capital market as of December 24 was recorded at IDR 358.4 trillion, the highest value in history with 55 new issuers recorded. The majority of this fundraising is used as working capital.

Meanwhile, the banking intermediation function in November 2021 grew by 4.82 percent yoy or 4.17 percent year-to-date (ytd) driven by an increase in MSME and retail loans.

“Indicators of the domestic economy also show continuous improvement. Real sector indicators such as manufacturing Purchasing Managers Index (PMI), consumer confidence index, vehicle sales, and job vacancies continue to increase," he said.

Meanwhile, the external sector is claimed to continue to improve as indicated by the trade balance surplus and an increase in foreign exchange reserves.

"This is expected to provide a buffer to reduce the impact of the normalization of monetary policy by major central banks, especially the Fed," said Anto.

In line with that, until December 24, 2021, the JCI was recorded to have strengthened by 0.4 percent mtd to the level of 6,563 with non-residents recording an inflow of Rp. 940 billion. Meanwhile, in the SBN market, non-residents recorded an outflow of Rp. 24.99 trillion, pushing the average yield on SBN to increase by 8 bps mtd across all tenors.

In the banking industry, the majority of the main credit sectors recorded an increase, especially in the manufacturing and household sectors by Rp. 24.9 trillion and Rp. 9.1 trillion, respectively. Meanwhile, Third Party Funds (TPF) recorded growth of 10.48 percent yoy or 9.98 percent ytd.

Then, the insurance sector managed to collect premiums in November 2021 of Rp. 26.1 trillion with Life Insurance premiums of Rp. 16.3 trillion, as well as General Insurance and Reinsurance of Rp. 9.8 trillion.

Meanwhile, the risk profile of financial service institutions in November 2021 was still maintained with the net NPL ratio recorded to fall to 0.98 percent (gross NPL: 3.19 percent) and the NPF ratio of financing companies recorded at 3.92 percent.

Meanwhile, COVID-19 credit restructuring continued the downward trend in November 2021, with COVID-19 restructuring loans recorded at IDR 693.62 trillion (October 2021 IDR 714.01 trillion). The number of Covid restructuring debtors also decreased from 4.4 million debtors to 4.2 million debtors.

"The OJK has consistently assessed the economy and the financial services sector together with the government and other relevant authorities as well as stakeholders in order to maintain financial system stability and encourage the acceleration of national economic recovery momentum," concluded Anto.