Banking Sector Value Economists Still Maintain Stability

Head of Bank Permata economist Josua Pardede. (Photo: Doc. ANTARA)

JAKARTA - Head of Bank Permata economist Josua Pardede said taking into account the performance of the banking sector throughout 2023, indicates that the financial services sector is stable and remains contributive to the economy.

In terms of banking performance, credit growth as of October 2023 recorded a growth of 8.99 percent (yoy), while DPK growth was recorded at 3.43 percent (yoy) with an LDR ratio of 84.19 percent.

In the midst of the positive banking intermediation function, banking capital remains solid, where the position as of October 2023 was recorded at 27.48 percent, increasing from the end of 2022 which was recorded at 25.63 percent.

Meanwhile, credit risk remains low, where NPL per Okt23 was recorded at 2.42 percent stable from the position at the end of 2022 which was recorded at 2.44 percent.

"We see credit and DPK growth in 2024 will strengthen slightly from 2023 to 8.69 percent and 5.87 percent, respectively," he told VOI, Tuesday, December 12.

Josua said credit growth would tend to follow economic growth, which would remain in the range of 5 percent, supported by solid domestic demand.

Meanwhile, the growth of private consumption can be maintained, supported by controlled inflation and continued BLT programs and social assistance from the government. The growth in government consumption will be maintained in the midst of the political year, especially for spending related to the implementation of the 2024 General Election.

The formation of Gross Fixed Capital will also be supported by the continuation of PSN and the development of IKN.

DPK's growth will improve amid the potential for inflow due to increased risk-on sentiment, especially in the second half of 2024.

According to Josua, government consumption spending which increases due to the election year can also increase the DPK because it will reduce government account funds in BI.

In line with credit growth that has the potential to improve, deposit creation processes can also be accelerated.

"The improvement in credit and DPK conditions in 2024 will also be supported by BI's reference interest rate cutting space, and liquidity which remains simple amid the continuing of BI's loose macroprudential policy until the end of 2024," he concluded.