LPS: Performance Of The Indonesian Banking Industry Is Stable

Photo: Doc. Antara

JAKARTA - The Deposit Insurance Corporation (LPS) said the performance of the banking industry grew stable with maintained credit risks, followed by adequate capital and liquidity resilience.

"Bank intermediation performance continues to improve," said LPS Board of Commissioners Purbaya Yudhi Sadive at a press conference in Jakarta, quoted from Antara, Wednesday, May 28.

As of April 2024, bank credit grew by 13.09 percent year on year (yoy), while Third Party Funds (DPK) grew by 8.21 percent (yoy).

The fundamental condition of banking continues to be maintained, the industrial capital ratio (KPMM) which was maintained at the level of 26 percent in March 2024. Meanwhile, banking liquidity was consistently above the threshold with the AL/NCD ratio at the level of 113.94 percent and AL/DPK at 25.62 percent in April 2024.

LPS's deposit guarantee coverage is also at an adequate level, which is in accordance with the mandate of the law (UU), LPS guarantees that every bank customer deposit account in Indonesia is up to IDR 2 billion per customer per bank.

Based on data from April 2024, the number of commercial bank customer accounts guaranteed by all deposits is 99.94 percent of the total account or equivalent to 573.915 accounts.

Meanwhile at BPR/BPRRS, the number of accounts guaranteed by all deposits (store up to Rp2 billion) is 99.98 percent of the total account or equivalent to 18.32 million accounts.

Furthermore, Purbaya said, LPS continues to monitor movements on trends in national banking deposit interest rates, both those with rupiah and foreign exchange denominations.

Based on data on the movement of interest rates, deposit market interest rates (SBP) for rupiah deposits were observed to fall 9 basis points (bps) to the level of 3.41% compared to the TBP determination period in January 2024.

"In line with the central bank's macroprudential policy in providing incentives to encourage liquidity, it is hoped that the banking space to manage liquidity will be more open so that there is no significant increase in interest rates," he said.

Furthermore, the SBP for foreign exchange deposits in the same observation period was observed to increase by a limited increase of 11 bps to 2.12 percent compared to the TBP determination period in January 2024.

"The condition of foreign liquidity, shifting expectations against timing and the amount of cutting the Fed Fund Rate interest rate will still affect the dynamics of the SBP Valas movement going forward, which is clear that any of our policies will not interfere with economic recovery," he said.