The Jakarta Post
Bank Indonesia (BI) is calling on local banks to improve their efficiency so they can benefit from the growth of Asia’s banking industry.
BI Governor Darmin Nasution said Friday that in terms of efficiency, asset quality and capitalization, Indonesian banks still lagged behind their peers in other Association of Southeast Asian Nations (ASEAN) member countries.
Darmin said the average operating cost to operating income ratio (operating ratio) and net interest margin (NIM) of Indonesian banks was 82 percent and 6 percent, respectively.
These figures were much higher than banks in Singapore, Malaysia and the Philippines. According to Darmin, the operating ratio and NIM of banks in neighboring countries were between 33 and 73 percent and 2 to 5 percent, respectively.
“Indonesian banks have the lowest efficiency rate in the ASEAN-5,” he said, referring to t...