The Most Compliant Red Plate Banks Lower Credit Interest Rates, BI Boss: Thank You, BUMN Bank

Governor of Bank Indonesia Perry Warjiyo. (Photo: BI)

JAKARTA - The Governor of Bank Indonesia (BI) Perry Warjiyo said that state-owned enterprises (BUMN) engaged in banking services were recorded as the most aggressive entity in transmitting the reduction in the prime lending rate (SBDK) in accordance with the direction of the monetary authority.

According to Perry, the decline in prime lending rates mainly occurred in the state-owned bank group, which fell by 266 basis points (bps) to 8.70 percent year-on-year (yoy). This note was bigger than the decline in prime lending rates for other bank groups.

"The low monetary policy interest rate and loose liquidity have pushed interest rates down," he said during a virtual press release, Tuesday, April 20.

However, this then has an impact on the company's business ability to produce cuans that tend to be depressed.

"The profit margins of the state-owned banks and KCBA (foreign bank branch offices) group decreased by 88 bps and 34 bps (yoy)," he said.

Meanwhile, the profit margins of national private commercial banks (BUSN) and regional development banks (BPD) still show an increase of 48 bps and 2 bps (yoy) in February 2021.

Furthermore, BI revealed that the banking industry responded to the transparency of interest rates by lowering prime lending rates as of February 2021 by 171 bps (yoy).

The decline in prime lending rates occurred in all types of credit, with the deepest decline in micro credit at 346 bps (yoy), although it was still the type of credit with the highest prime lending rate at 12.72 percent.

Then, the decline in prime lending rates that occurred in the type of mortgage consumption credit, non-mortgage consumption, corporate and retail was 194 bps, 193 bps, 139 bps and 136 bps (yoy) to 8.19 percent, 9.25 percent, respectively. 8.26 percent, and 8.84 percent.

Meanwhile, the decline in prime lending rates in industry occurred in all components, namely the basic cost of credit (HPDK) of 120 bps (yoy), followed by 31 bps (yoy) of overhead costs (OHC) and 21 bps (yoy) of profit margins.