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ajor banks expect to scale down their spending on business expansion and technological advancement next year, as subdued economic growth is seen to cloud the country'€™s banking industry.

Bank Negara Indonesia (BNI) president director Achmad Baiquni said the lender was still in the process of determining next year'€™s capital expenditure (capex), which is to be included in the business plan submitted to the Financial Services Authority (OJK) by the end of November.

Baiquni said BNI'€™s capex, which included IT expenditure, would be slightly lower than the Rp 3 trillion (US$218 million) earmarked for capex in 2015, as the bank had already renewed some of its IT infrastructure through previous investment.

'€œWe will allocate more of our 2016 capex on purchasing buildings for some of our existing branches, which are currently renting office space,'€ Baiquni said.

According to Baiquni, BNI'€™s spending on IT infrastructure next year would mainly serve to '€œcreate more features in our products.'€

Meanwhile, Bank Mandiri finance and strategy director Kartika '€œTiko'€ Wirjoatmodjo said the lender'€™s capex for 2016 would amount to Rp 1.7 trillion, which comprised IT expenditure equivalent to $100 million and non-IT spending of Rp 400 billion.

The capex planned for 2016 is less than half of the total of Rp 3.5 trillion set for this year, only 75 percent of which was predicted to actually be realized, Tiko said.

'€œOur IT capex for 2016 amounts to $100 million, which is lower than the $200 million this year, because we are now only integrating our data and system for customer relationship management [CRM],'€ Tiko said.

With a more advanced CRM system, Tiko said, the bank'€™s staff in branches across the country could be more focused in their marketing efforts, while cross-selling in all subsidiaries and by partners would be more sophisticated.

In the long run, Tiko said, Mandiri also planned to replace its internet banking and mobile banking interfaces with new ones in order to harden them against malware and hacks in the future.

The economic slowdown has taken a toll on the country'€™s banking industry. Most banks not only reported lower profit growth in the first nine months of this year, but also a higher percentage of non-performing loans. Relatively weak economic growth is expected to continue into next year, as no significant improvement in the country'€™s exports or housing spending are expected.

Bank Central Asia (BCA) vice president director Eugene K. Galbraith said the lender was still calculating its capex for 2016, but predicted higher expenditure on imported goods and services due to the depreciation of the rupiah.

Galbraith said the bank would continue to allocate funds for its IT systems next year to advance mobile banking and internet banking as well as improve product features.

State-owned lender Bank Rakyat Indonesia (BRI) and private lender Bank Danamon are expecting capex to increase slightly in 2016, especially spending on IT infrastructure.

BRI finance director Haru Koesmahargyo said BRI'€™s capex for 2016 might increase by 5 to 10 percent compared to 2015 to between Rp 4 trillion and Rp 5 trillion, even though this year'€™s absorption so far was only about 30 percent of the target, as several projects had yet to be completed.