HSBC Believes Indonesia's Banking Performance In 2023 Is Better Than The Previous Year

JAKARTA - Managing Director and Head of Securities Services of PT Bank HSBC (Hongkong and Shanghai Banking Corporation Limited) Indonesia Ali Setiawan is optimistic that the performance of national banking in general will be better this year than the previous year.

"This year's banking performance will be very bright because in terms of the provisions they include it can be released when they have refinancing their portfolio," said Ali, quoted from Antara, Tuesday, April 11.

In addition, he said, the current trend of benchmark interest rates is still high, so banks will enjoy a fairly large spread of the benchmark interest rate with a banking interest rate. On the other hand, the risk of bad credit (Non-Performing Loan/NPL) which had accumulated in recent years due to the COVID-19 pandemic has slowly been improved.

Currently, Bank Indonesia's benchmark interest rate (BI) is at a fairly high level, which is 5.75 percent, while the national banking interest rate in the money market, namely the IndONIA interest rate, is at the level of 5.53 percent on March 15, 2023. The credit interest rate in February 2023 is at the level of 9.34 percent.

The controlled credit risk, reflected in the low national banking NPL, amounting to 2.59 percent (gross) and 0.76 percent (neto) in January 2023.

Nevertheless, Ali reminded that asset growth is still a challenge for national banking because this year and next year is a political year, which tends to be the cause of slowing demand from the corporate sector.

"This condition can have an impact on the opportunity to grow assets for banks," he said.

Therefore, he said that his party would still have a reliable strategy in the political year, namely through international connectivity to open up many opportunities for various Indonesian companies that want to explore business, transactions, or opportunities with international markets.

"The strategy is carried out both in terms of transactions and domestic consultations, borrowing, or from the capital market," Ali added.