BI Boss Says Strong Banking Conditions Post-Restructuring Of COVID-19 Loans Ends

RDG BI July 2024 (Photo: Aris Nurjani/VOI)

JAKARTA - Bank Indonesia (BI) expresses that the resilience of Indonesia's financial system is maintained, both reflected in the prudent banking system in the distribution or financing and mitigating credit risk, including the end of the COVID-19 pandemic credit restructuring stimulus.

BI Governor Perry Warjiyo conveyed that Indonesia's financial system resilience was reflected in good liquidity conditions until the second quarter of 2024.

"Bank liquidity in the second quarter of 2024 remains adequate as reflected in the ratio of Liquid Equipment to Third Party Funds (AL/DPK) which is still recorded at 25.36 percent," he said at a press conference, Wednesday, July 17.

In addition, Perry said that the risk of non-performing loans (NPL) in May 2024 was also low, at 2.34 percent (gross) and 0.79 percent (neto).

According to Perry, strong financial system defense is supported by banks that remain prudent in lending/financing and mitigating credit risk, including the risk of ending the credit restructuring stimulus for handling the COVID-19 pandemic.

Meanwhile, this resilience was supported by the high capital adequacy ratio (CAR) of banks of 26.14 percent and the high ratio of value-loss Reserves (CKPN) for total bank-problem loans.

Perry conveyed that banking resilience was also supported by the ability to pay for corporations and households that remained strong, as was the result of the latest banking stress test.

"In the future, Bank Indonesia will continue to strengthen policy synergies with KSSK in mitigating various risks that have the potential to disrupt financial system stability," he said.