Lenders Expect Loan Growth to Accelerate in 2017: Central Bank
Jakarta. Major banks in Indonesia expect loan disbursement to accelerate this year driven by a rising demand in the trading and construction sectors, Erwin Rijanto, Bank Indonesia's deputy governor said on Monday (13/02).
Preliminary data from the central bank showed that loan growth could expand by 10 percent in January, compared to the same period last year, picking up the pace from December when it only grew by 7.8 percent, compared to the same period in 2015, Erwin said.
Lenders predict an increase in loan disbursement at 12 and 13 percent this year, according to data submitted to the central bank.
However, the central bank projects that loan growth will be more conservative this year, estimated at 10 percent to 12 percent, taking into account nonperforming loans – or loans that have not been serviced for at least 90 days – that lenders need to unwind before they can disburse new loans, Erwin said.
"The sectors that will drive loan growth this year are trading and construction," he said.
The government plans to spend Rp 194 trillion ($14.6 billion) to develop infrastructure across the country, up from Rp 165 trillion spent in 2016. That would create demand for building material from suppliers and construction services from contractors, who would turn to banks to finance their working capital.
Meanwhile, some banks are relying on consumer spending to increase this year, raising demand for credit cards, vehicle and housing loans.
Benny Purnomo, the president director of Bank MNC Internasional, a listed lender controlled by business conglomerate MNC Group, said that he expects that consumer loans to grow by 15 percent to Rp 9.08 trillion this year.
"We are strengthening our consumer business by targeting the youth market," Benny said.
CIMB Niaga, Indonesia's fifth-largest lender by assets, also predicts that consumers will drive its loan growth this year, expecting a demand for housing loans to increase.
"For mortgages, we target loan growth to reach between 8 percent to 10 percent, while credit cards would account for 10 to 15 percent of loan disbursements," Lani Darmawan said, CIMB Niaga director of consumer banking.
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