T

he Indonesian subsidiary of US-based Citibank is confident that the Indonesian banking sector will pick up again following the effects of the government'€™s recently announced economic stimulus packages.

The packages will likely revive lending growth, the bank'€™s senior executive has said.

Citibank Indonesia CEO Batara Sianturi said that the recent economic packages released by the government and the positive feedback from US President Barack Obama upon meeting with President Joko '€œJokowi'€ Widodo in Washington DC would boost growth in real sectors in the near future.

'€œThe growth of banking depends on the growth of real economic sectors. So from the existing facts, we'€™re optimistic that there will be growth in 2016 in real sectors that will in turn affect the banking sector as they will need more lending,'€ Batara said during the launch of Citibank'€™s Smart Branch in Pantai Indah Kapuk in North Jakarta on Friday.

The government has, since September, issued five economic packages easing permits for new businesses and lending for small and medium enterprises. The packages also cut energy prices to lower production costs for industry, set up fixed five-year wage formulas, allowed asset revaluation with lower tax and omitted the double taxation principle for real estate investment trusts (REIT).

Businesspeople welcomed the packages and expect to reap their implications starting next year.

In the US last week, Jokowi witnessed the signing of at least 12 business deals worth around US$20 billion in real sectors such as power, transportation and banking between state and private Indonesian and
US firms.

Batara said that currently its corporate clients varied from those in the commodity sector to those in the healthcare and consumer goods sector. Though the commodity sector has been facing a lackluster climate, he believed that stronger growth would come from other sectors such as property, healthcare and consumer goods.

Indonesia'€™s major banks reported a drop in their lending and earnings growth in the third quarter this year amid the country'€™s weakening economic growth.

Meanwhile, Citibank country business manager Lauren Sulistiawati said that Citibank would remain focused on its core competency in retail and corporate banking. The bank'€™s main operations, meanwhile, would remain in credit cards and loan and wealth management, or what is known as '€œCitigold'€, she added.

Lauren said its market share for credit cards was 15 to 16 percent nationwide while wealth management, comprising insurance and investment management, covered 15 to 17 percent. Its Citigold customers, with savings of at least Rp 500 million (US$37,000), amounted to 25,000 customers, with total savings of about $1 billion.

She added that to better serve its customers and Citigold customers, Citibank had launched a new branch concept called the Citibank Smart Branch. The smart branch system incorporates more digitalized banking transactions and paperless administrative processes.

Each branch will have a workbench and a touch screen that allows customers to open new accounts and take care of their existing accounts. Customers can also conduct teleconferences with managers from other branches. Smart branches also offer Citigold customers a special lounge.

The bank currently has four smart branches in Jakarta: Abdul Muis and Prince Center in Central Jakarta and Kelapa Gading and Pantai Indah Kapuk in North Jakarta. (rbk)