One Decade In The Financial Sector, OJK Claims Industry Maintained And Grows Positively

Illustration (Photo: Doc. Antara)

JAKARTA - At the beginning of this week on November 22, the Financial Services Authority (OJK) turned 10 years old. During this age range, the authorities claim that the financial services sector remains stable and continues to grow.

OJK Deputy Commissioner for Public Relations and Logistics Anto Prabowo said this indication could be seen from the increase in the intermediation function in both the banking sector and in the non-bank financial industry (IKNB) as well as increasing fundraising in the capital market.

"The stable condition and performance of the financial services sector that is maintained and continues to grow positively amid efforts to recover the economy marks the celebration of the OJK one-decade anniversary which fell on November 22," he said in an official statement, Wednesday, November 24.

According to Anto, the Board of Commissioners' Meeting (RDK) for the November 2021 period noted that global economic activity is recovering, but it is still necessary to observe the trend of increasing positive cases of COVID-19 in Europe which has an impact on mobility restrictions.

In addition, he also conveyed the need to pay attention to the tapering off of the US and the plan to normalize economic and monetary policies in several major world economies in line with persistent increases in inflation.

"Although the Fed has taped off in November 2021, the Indonesian stock market and the Government Securities (SBN) market can still strengthen and become one of the best performing financial markets in emerging markets," he said.

In detail, Anto explained that the Indonesia Stock Exchange (IDX) managed to record an all-time high on November 19, 2021, at the level of 6,720. Meanwhile in the SBN market, as of November 19, 2021, non-resident investors recorded an outflow of Rp24.1 trillion with an average yield of minus 7.3 bps in line with the government's policy not to issue bond issuances until the end of 2021.

The banking intermediation function in October 2021 again recorded an increasing trend with credit growing by 3.24 percent (year-on-year/yoy) or 3.21 percent (year-to-date).

Then, raising funds in the capital market until November 22, 2021, has reached a value of Rp312.4 trillion, an increase of 300.7 percent from the same period last year, with the addition of 43 new issuers.

As for the IKNB sector, the insurance industry collected premiums in October 2021 of Rp23 trillion with Life Insurance premiums of Rp14.1 trillion, as well as general insurance and reinsurance of Rp8.9 trillion.

Then, fintech peer-to-peer (P2P) lending in October 2021 recorded a growth in outstanding financing of 110.7 percent (yoy) or Rp0.42 trillion (ytd: Rp12.59 trillion).

"Along with the improving performance of the domestic financial services sector, the risk profile of financial services institutions in October 2021 was well maintained with the net NPL ratio recorded a decline of 1.02 percent with a gross NPL of 3.22 percent, and the NPF ratio of financing companies of 3.89. percent," continued Anton.

In terms of capital, financial services institutions also recorded an improving capital. The banking industry recorded an increase in CAR to 25.34 percent or well above the threshold.

Meanwhile, the life insurance and general insurance industries recorded Risk-Based Capital (RBC) which also increased by 605.9 percent and 352.0 percent, respectively, which is far above the threshold of 120 percent. Likewise, the gearing ratio of finance companies was recorded at 1.93 times or far below the maximum limit of 10 times.

"The OJK consistently conducts assessments of the economy and the financial services sector together with the government and other relevant authorities and stakeholders in order to maintain financial system stability amidst the momentum of accelerating national economic recovery," concluded Anto.