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BRI projects drop in credit growth, net interest margins
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Bank Rakyat Indonesia (BRI) president director Sunarso gives a presentation in June 2020 on BRI’s services for micro, small and medium enterprises (MSMEs). (Photo courtesy of BRI)
B
ank Rakyat Indonesia (BRI) expects lower credit growth in the banking industry this year and a drop in net interest margins amid a possible global recession.
The state-owned lender estimates credit growth in the range of 6.39 to 7.74 percent, down from 8.91 to 11.14 percent in 2022, while it sees net interest margins around 6 percent, lower than the 7.7 to 7.9 percent expected for 2022.
The bank expects inflation to ease somewhat, with the consumer price index (CPI) seen to rise between 3.57 to 3.92 percent, down from the 5.51 percent annual increase seen in 2022.
Meanwhile, it anticipates a slowdown in GDP growth to between 4.42 and 5.04 percent this year, which would be down from the estimated 5.08 to 5.29 percent achieved in 2022.
“Banks are still compelled to expand their intermediary function, because the net interest margins are getting smaller,” BRI president director Sunarso said on Tuesday.
BRI expects a lower interest rate environment this year due to an expected global economic slowdown, while inflation will still remain elevated.
To compensate for the expected lower credit yields, BRI plans to increase its customer, Sunarso told lawmakers of House of Representatives Commission XI in a hearing.
