The nation’s commercial banks posted a total Rp 57.31 trillion (US$6.42 billion) in net profits in 2010, a 26.76 percent increase compared with the Rp 45.21 trillion booked a year earlier, Bank Indonesia’s (BI) latest data shows.
The growing profits were in line with lenders’ loan disbursements throughout 2010, reaching Rp 1,765.84 trillion, up 22.8 percent from Rp 1,437.93 trillion in 2009, according to the data released on Monday.
Despite the rapid loan growth that spurred the country’s economy to increase 6.1 percent last year, several economists criticized that the loan disbursement was still too low in Indonesia to support expansion in Southeast Asia’s biggest economy.
Noted economist from the University of Indonesia, Faisal Basri, posted on his Twitter account (@faisalbasri) on Tuesday that the country’s private credit to gross domestic product (GDP) ratio was “only 22.8 percent, far lower compared with India (48 percent), Thailand (78 percent), Vietnam (90 percent), Malaysia (96 percent)”.
Third party funds grew slower at 18.53 percent compared with the loan growth, standing at Rp 2,338.82 trillion as of the end of December, versus Rp 1,973.04 trillion a year earlier. According to Faisal, Indonesia’s bank deposits to GDP ratio of 34 percent was also lower compared with neighboring countries.
“India’s is at 63 percent, Vietnam’s at 74 percent, Thailand’s at 84 percent and Malaysia’s at 109 percent,” he said, adding that the weakness of the nation’s financial sector hampered the overall economy’s acceleration.
Faster loan growth compared with the third party funds brought nationwide banks’ loan-to-deposit ratio (LDR) up to 75.21 percent compared with 72.88 percent in 2009. Meanwhile, net interest margin (NIM) increased to 5.73 percent from 5.56 percent in the year before.
Assets of the overall 122 banks reached Rp 3,008.85 trillion as of the end of December, a 20 percent increase compared with 2009’s Rp 2,543.11 trillion. The capital adequacy ratio stood at 17.18 percent at the end of last year.
