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.
Bank Mandiri lowers 2021 credit growth forecast to 3–4 percent
Change Size
S
tate-owned Bank Mandiri has lowered its credit growth outlook for this year to between 3 and 4 percent, down from 5 percent, as it takes into account the effect of recent COVID-19 mobility restrictions.
The latest credit growth outlook assumes that Indonesia’s GDP will grow by 3.69 percent this year, according to Panji Irawan, the bank’s treasury and international banking director.
“Bank Mandiri is optimistic that banking intermediaries will keep improving gradually in line with the national economic recovery,” Panji said in an online briefing on Thursday. “The collaboration among fiscal, monetary and other financial service and market authorities makes this movement coordinated, synergized and harmonious.”
The downward revision follows Bank Indonesia’s (BI) move to slash its industrywide forecast for credit growth to between 4 and 6 percent from between 5 and 7 percent following the tightening of mobility restrictions in July.
In July, loan disbursement grew only 0.5 percent year-on-year (yoy) to Rp 5.56 quadrillion (US$389.57 billion), BI data show. This is slightly slower than the nearly 0.6 percent yoy growth seen in June.
Read also: Credit growth slows, NPL ratio up slightly in July
This year’s credit growth outlook points to a recovery from last year’s 2.4 percent contraction as the pandemic forced businesses to close, reducing demand for loans.
In the second quarter, Bank Mandiri, the country’s largest bank by assets, channeled Rp 1.01 quadrillion worth of credit, up around 16.4 percent from a year earlier.
The publicly listed lender reported a nonperforming loan (NPL) ratio of 3.08 percent, lower than the 3.28 percent NPL ratio it had a year earlier.
The industrywide NPL ratio, according to BI data, rose slightly to 3.31 percent in July from 3.2 percent in June.
Andry Asmoro, Bank Mandiri’s chief economist, said maintaining asset quality remained the key challenge for the banking sector, especially in terms of reducing the share of loans at risk.
“If we look at the development of restructured loans, the amount has declined further compared with December, but was up slightly in June, and in July as well, we expect, because of the PPKM,” said Andry, referring to the mobility restrictions.
Restructured loans stood at Rp 792 trillion in June, down 18.43 percent from December, according to Bank Mandiri, quoting data from the Financial Services Authority (OJK).
The OJK recently extended the loan restructuring program for a second time, to March 2023.
