OJK Calls The National Banking Industry Still Competitive

JAKARTA - OJK Banking Supervision Chief Executive Dian Ediana Rae said that in the midst of global uncertainty and the prospect of slowing global economic growth, Indonesia's banking industry in November 2023 remained resilient and competitive.

"This is supported by relatively high levels of profitability (ROA) and capital (CAR) in November 2023, amounting to 2.73 percent and 27.89 percent, respectively," said Dian in a virtual press conference of the Board of Commissioners (RDK) Meeting, Tuesday, January 9, 2024.

Meanwhile, in terms of intermediation performance, in November 2023, credit increased by Rp618.43 trillion or grew 9.74 percent (yoy) compared to October 2023 by 8.99 percent (yoy) to Rp6,965.90 trillion. The highest growth occurred in working capital loans of 10.14 percent (yoy).

Meanwhile, judging from the ownership of the State-Owned Enterprises Bank (BUMN), it is the main driver of credit growth, which grew by 12.13 percent, with a loan portion of 45.81 percent of total bank credit.

The contribution of the banking sector in financing to encourage sustainable national economic growth is also realized through the purchase of non-bank corporate bonds and the purchase of Government Securities (SBN) by banks so that banking sector ownership of corporate bonds and SBN reaches IDR 269.46 trillion and IDR 1,436.31 trillion.

Meanwhile, the growth of Third Party Funds (DPK) in November 2023 was recorded at 3.04 percent (yoy) lower than October 2023 at 3.43 percent (yoy) or to Rp. 8,216.21 trillion, with deposits becoming the largest growth contributor, namely 3.50 percent (yoy).

Several things that have affected the slowdown in DPK growth include the high growth of the DPK during the pandemic which resulted in a high base effect on the subsequent growth of the DPK.

In addition, the slowdown in DPK growth was also caused by the use of internal funds for the company's operations and expansion, public consumption which again increased with the end of the pandemic status, as well as the impact of the increasing number of alternative funds placement instruments other than the DPK.

Meanwhile, banking industry liquidity in November 2023 was at an adequate level with liquidity ratios well above the level of need for supervision.

Meanwhile, the Liquid/Non-Core Deposit (AL/NCD) and Liquid/DPK (AL/DPK) Equipment ratios rose to 115.73 percent respectively compared to October 2023 at 117.29 percent and 26.04 percent compared to October 2023 at around 26.36 percent, or far above the threshold/mining limit of 50 percent and 10 percent, respectively.

Meanwhile, credit quality is maintained with a net banking NPL ratio of 0.75 percent compared to October 2023 of around 0.77 percent and gross NPL of 2.36 percent compared to October 2023 of 2.42 percent.

Along with national economic growth, the number of Covid-19 restructuring loans continued the downward trend to IDR 285.32 trillion compared to October 2023 of IDR 301.16 trillion or decreased by IDR 15.84 trillion, with the number of customers recorded at 1.14 million customers when compared to October 2023 of 1.22 million customers or a decrease of around 80 thousand customers.