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Regulators predict growth in bank funding
As pressure on liquidity is forecast to ease next year, the financial regulators predict that the banking industry will experience higher growth in third-party funds (DPK) in 2015 than in this year
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As pressure on liquidity is forecast to ease next year, the financial regulators predict that the banking industry will experience higher growth in third-party funds (DPK) in 2015 than in this year.
The Financial Services Authority (OJK) predicts that overall funding will rise by between 18 and 19 percent in 2015, up from the 14 to 16 percent range it has set for this year.
'Our observation shows that pressure on liquidity has started to ease in line with a slowdown in overall lending growth. So we think that funding can grow next year because demands for loans will not be so compelling,' OJK chairman Muliaman D. Hadad said late Wednesday.
By setting the growth rate at 18 to 19 percent, the banking industry is expected to manage around Rp 4.32 quadrillion (US$354.64 billion) in third party funds in 2015, comprising savings, time deposits and demand deposits.
OJK commissioner on banking supervision, Nelson Tampubolon, acknowledged that the third party fund growth target was much higher than the 2014 projection. He, however, maintained the OJK's confidence that this target was feasible.
'The funds can come from various sources, both public and private. As long as the economy is still growing, the funds will still be around,' he said.
He added that the OJK expected the high portion of time deposits ' also known as high-cost funds ' in third party funds would slowly decline, especially with the recent capping of time deposit interest rates.
According to the latest banking statistics, time deposits alone made up 47.2 percent of total third party funds in August, while savings and demand deposits accounted for 30.9 percent and 21.8 percent, respectively.
- OJK predicts overall funding will rise by 18-19 percent in 2015
- The industry is expected to manage around Rp 4.32 quadrillion (US$354.64 billion) in DPK in 2015
- BI sets next year's lending growth at 15 to 17 percent
Meanwhile, Bank Indonesia (BI) predicts there will be an uptick in funding growth as well in 2015, even though not as 'impressive' as that forecast by the OJK.
BI deputy governor Halim Alamsyah said Thursday that the central bank expected total funding to increase by about 14 to 16 percent next year. 'We will still post growth, but it may not be much different from our 2014 guideline, which is between 12 and 14 percent,' he said.
On the other hand, BI has set next year's lending growth at 15 to 17 percent, unchanged from 2014.
With a similar rate between funding and lending, BI hoped to see the average loan-to-deposit ratio (LDR) fall to a more comfortable level of 89 to 90 percent, according to Halim.
As previously reported, the industry's ratio has been on the rise for the past several months, revolving around 90 to 92 percent, triggered by lending growth that has outpaced funding.
Separately, executives at PermataBank and OCBC NISP also said that positive third party fund growth was on the horizon for them.
Permata acting president director Roy Arman Arfandy said the bank was looking at a 12 percent growth year-on-year in funding, while OCBC NISP president director Parwati Surjaudaja said that third party funds would be better than 2014.
