OJK: The Performance Of The Stable Banking Industry Of The Republic Of Indonesia Is ABLE To Encourage Optimism Amidst The Global Economy

Illustration. (Photo: Doc. Antara)

JAKARTA - Chief Executive of Banking Supervision of the Financial Services Authority (OJK) Dian Ediana Rae said that the strong and stable performance of the banking industry during 2022 was able to encourage optimism amid the turmoil in the global economy.

"OJK is optimistic that banking conditions will be maintained and support national economic growth, although risks need to be watched out for amid global uncertainty that could lead to a slowdown in economic growth," he said in an official statement, quoted from Antara, Wednesday, January 11.

OJK noted that in November 2022 bank credit grew 11.16 percent (yoy) while the collection of Third Party Funds (DPK) grew by 8.78 percent (yoy).

The credit and DPK growth rates have recorded growth rates that exceed the pre-pandemic level of COVID-19 with maintained banking risk indicators. Good banking development is also reflected in complex liquidity conditions as reflected in the AL/NCD and AL/DPK ratios of 134.97 percent and 30.42 percent, respectively.

Bank capital is also relatively strong and is believed to be able to absorb the risks faced with CAR by 25.49 percent. The risk of credit tends to decrease as reflected in the ratio of NPL both gross and netts by 2.65 percent and 0.75 percent, respectively, Loan at Risk by 15.12 percent.

"The decrease in credit risk is partly due to improving credit quality which is restructured by the impact of COVID-19," said Dian.

Although current financial system stability is well maintained, Dian reminded that banks must be aware of risks amid global uncertainty that could lead to a slowdown in economic growth such as the scarring effect of the COVID-19 pandemic, an increase in yields of securities, the potential for rupiah depreciation and a decrease in liquidity.

OJK as a regulator in order to maintain sustainable financial system stability and economic growth, future banking policies are aimed at strengthening banking regulation and supervision as well as developing a healthy, efficient and integrity banking industry.

"OJK will continue to strengthen the early warning system which is supported by information technology so that it can detect financial problems early and other aspects and carry out surveillance measures early before the problem drags on and becomes big," said Dian.

In line with the program, OJK will also continue to consolidate banks, especially against Islamic banking, Regional Development Banks and BPR/BPRRS.

BPD consolidation is carried out through the establishment of an Integrated Bank (KUB) Business Group, namely with a large scale bank as the Main Bank which can meet liquidity and capital needs and create synergies in the expansion of banking products and services, strengthening governance and infrastructure (technology and human resources), increasing customer bases.