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Bad loan ratio to stay at tolerable levels: Central bank
Bank Indonesia predicts that the banking industry will see its gross non-performing loan (NPL) ratio stay within tolerable levels this year on the back of gradual economic recovery after a global slowdown.
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Guardians of monetary policy: Bank Indonesia deputy governor Perry Warjiyo (left), governor Agus Martowardojo (second left), senior deputy governor Mirza Adityaswara (second right) and deputy governor Hendar speak at a press conference at the central bank in Jakarta on Thursday. (JP/Anton Hermansyah)
B
ank Indonesia (BI) predicts that the banking industry will see its gross non-performing loan (NPL) ratio stay within tolerable levels this year on the back of gradual economic recovery after a global slowdown.
“We predict that the gross NPL ratio will reach its peak at 3.2 percent,” BI deputy governor Perry Warjiyo said on Thursday, as quoted by kontan.co.id.
Financial regulators consider the gross NPL ratio, an indicator of bad loans, to be healthy under 5 percent. A gross NPL surpassing 5 percent will trigger special supervisions from regulators.
Overall, in the nationwide domestic banking industry, gross NPL had surged to 3.18 percent as of July, up from 2.7 percent in the same month the previous year, the Financial Services Authorities (OJK) data showed. The NPL ratio in the mining and excavation sector, meanwhile, had skyrocketed from 3.81 percent to 6.75 percent. (hwa)
