TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Banks did better in H1 but it might be 'calm before storm'
While Indonesian banks saw improved performance in the first half of 2021, analysts warn that the second wave of COVID-19 and extended curbs may spell trouble for the industry in the second half.
Change Size
An employee counts US dollar bills at state-owned Bank Mandiri’s cash center in Jakarta, in this undated photo. Banks have become cautious about offering loans as some borrowers struggle with repayments during the prolonged pandemic and attendant restrictions. (JP/Dhoni Setiawan)
M
ajor Indonesian banks have shown solid performance in the first half of the year, although analysts warn that the current period could be "the calm before the storm" as prolonged restrictions to rein in the second wave of COVID-19 could lead to performance deterioration in the second half.
State-owned Bank Mandiri, the largest lender by assets, followed by state-owned Bank Tabungan Negara (BTN) and the country’s biggest private lender Bank Central Asia (BCA), saw net profits increase between 18 and 21 percent year-on-year (yoy) in the second quarter.
Marking the first increase since October 2020, loan disbursements in the banking sector grew 0.59 percent yoy in June, according to Bank Indonesia (BI) and the Financial Services Authority (OJK). Mandiri and BTN saw even faster loan growth at respectively 16.37 percent and 5.59 percent, while BCA recorded 0.3 percent loan contraction.
Bank Danamon and Bank Permata achieved loan growth of 11 percent and 16.6 percent, respectively.
Performance was good with improvements “on the right track”, Suria Dharma, research head at securities firm Samuel Sekuritas, told The Jakarta Post on Monday.
“But since there [was the large-scale] restrictions in the same quarter last year, [this year’s second-quarter] improvements was not significant, as the preceding year had a lower base,” he said.
Read also: Commercial banks stick with rosy credit growth expectations
