Banking Sector Optimistic Performance Is Maintained In The Fourth Quarter Of 2023

Chairman of the Board of Commissioners of the Financial Services Authority (OJK) Mahendra Siregar. (Photo: Doc. Antara)

JAKARTA - The results of the OJK Banking Business Orientation Survey (SPBO) show that banks are optimistic that performance will be maintained in the fourth quarter of 2023, as can be seen from the Banking Business Orientation Index (IBP) which was recorded at 62 or in the optimistic zone.

"The results of the fourth quarter-023 SBPO show that the banking sector remains optimistic amid the volatility of global conditions and the dynamics of domestic macroeconomic conditions," said OJK Banking Supervision Chief Executive Dian Ediana Rae in Jakarta, quoted from Antara, Sunday, November 26.

The survey was conducted on 95 banks with total assets covering 94.87 percent of the total assets of 105 commercial banks.

Expectations for banking performance in the fourth quarter of 2023 are also at an optimistic level with a Performance Expectation Index (IEK) of 84.

"The banking performance optimism is driven by expectations that the funding side (Third Party Fund/DPK) will still be able to support the increase in lending which has an impact on increasing banking profit and capital," said Dian.

Banking is optimistic that credit will continue to grow in the fourth quarter of 2023 because the domestic economy is implemented to continue to grow well with maintained purchasing power and increased consumption.

"In terms of raising funds, respondents estimate that in the fourth quarter of 2023, DPK will also grow in line with improving economic activities, banks will obtain sources of funds to support credit growth, and there are government funds that enter local banks," said Dian.

The survey results also show that respondents view that food sector inflation has relatively little significant effect on credit growth performance or debtor performance.

However, banks continue to carry out food inflation risk mitigation strategies, including by focusing on adding new customers or debtors in a prudent manner.

Based on the results of the same survey, the Macroeconomic Condition Expectation Index (IKM) in the fourth quarter of 2023 was at a level of pessimism with a value of 43, driven by predictions of lowering the exchange rate, increasing the benchmark interest rate as an effort to contain the weakening of the Rupiah exchange rate, and potential inflation.

However, the majority of respondents believe that the banking risk consisting of credit, liquidity, and market risks in the fourth quarter of 2023 is still under control, as the flexibility of the interest rate adjustment space is still quite large for banks.

This is supported by adequate banking liquidity, as well as an integrated and effective policy of the Financial System Stability Committee (KSSK) in countering global impacts.

Therefore, the Risk Perception Index (IPR) is at an optimistic level with a value of 58, which shows that banks are optimistic about being able to handle the risks of current macroeconomic conditions.

"Respondents believe that credit quality remains good, PDN is at a low level and is in a long position, and inability will still increase along with the increase in lending. Furthermore, liquidity risk is also expected to be maintained stable compared to the previous quarter," said Dian.