LPS Boss Reveals Indonesia's Banking Performance

LPS Data Exposure (ANTARA)

JAKARTA - Chairman of the Board of Commissioners of the Deposit Insurance Corporation (LPS) Purbaya Yudhi Sadewa explained the performance of the Indonesian banking industry. Purbaya said the performance of the banking industry was maintained stable, in terms of capital, liquidity and profitability.

"The intermediation function shows positive growth with credit disbursement growth that is higher than fund collection," he said at a press conference for Determining TBP for the September 2023 Period, in Jakarta, Friday, September 29.

Meanwhile, banking fundamentals through capital ratios (KPMM) are industrially at an adequate level, namely 27.46 percent as of July 2023, while liquidity indicators are also maintained as of August 2023 for AL/NCD at 118.51 percent and AL/DPK respectively. 26.49 percent.

"Meanwhile, banking ROA in the same period was stable at 2.75 percent," continued Purbaya.

In terms of the intermediation function, as of August 2023, banking credit grew 9.06 percent (yoy) with the collection of DPK (Third Party Funds) growing at 6.24 percent (yoy). "This condition is expected to continue in line with the domestic economic recovery," he added.

Positive performance in terms of capital and intermediation was accompanied by maintained credit risk aspects following the implementation of targeted credit restructuring relaxation for certain sectors and regions. The Gross Non-Performing Loan (NPL) ratio as of August 2023 is at a controlled level, namely 2.50 percent.

On the other hand, deposit insurance coverage by LPS is at an adequate level above the mandate of the law and far above the international best practice average.

Based on data as of August 2023, the number of commercial bank customer accounts whose deposits are guaranteed (deposits up to IDR 2 billion) is 99.94 percent of total accounts or the equivalent of 530.72 million accounts.

Meanwhile, at BPR/BPRS, the number of accounts whose deposits are guaranteed (deposits up to IDR 2 billion) is 99.98 percent of the total accounts or the equivalent of 15.56 million accounts.

"The value of banking deposit coverage is above the LPS Law's mandate of at least 90 percent, and the International Association of Deposit Insurers (IADI) rule-of-thumb, which is around 80 percent," concluded Purbaya.