The optimism is based on expected improvement in the country`s economic condition ..."
Jakarta (ANTARA News) - A survey by Bank Indonesia (BI) showed that banks are optimistic credits would grow stronger in the last quarter of this year.

Higher credit expansion was already recorded for bank credits in the third quarter of this year.

"The optimism is based on expected improvement in the countrys economic condition and a cut in bank lending rate in the last quarter of 2015," Executive Director of the Central Bank Tirta Segara said here on Monday.

The lending rate is expected to decline to follow expected decline in the interest rates ion deposits saving and gyro, Tirta said.

In the last quarter of 2015, working capital credits will be dominant, followed by consumer credits for housing, and apartment, motor vehicles and credit without collateral.

Around 51.3 percent of respondents said they would boost credit expansion inn the last quarter of 2015 with 43.6 percent said they would maintain their policy as in the third quarter.

"Though rising, credit expansion in the last quarter of 2015 is expected to remain prudent as the risk is still high. The principle of prudential banking would continue to be observed concerning collateral, premium on credit and credit agreement," Tirta said.

In third quarter a surge was already recorded in credit expansion with weighted net balance (SBT) 76.9 percent as against 66.7 percent in the previous quarter.

Growing financing requirement and optimism that the economy would improve are the main factors boosting credit expansion in the third quarter of 2015.

Amid the high optimism, banks remain cautious against growing risk of non performing loan (NPL), especially corporate credits although the NPL is still within a normal level (below 5 percent).

In August 2015, NPL of working capital credits and investment credits were 3.2 percent and 2.91 percent respectively -- up 0.25 percentage point and 0.21 percentage point respectively from June 2015.

The highest NPL was recorded in the construction sector reaching 5.46 percent , followed by public service, social culture and entertainment sector at 4.46 percent and trade and retail sector at 4.11 percent, transport , warehouse and communications sector at 3.72 percent and mining and quarry sector at 3.71 percent.
(Uu.H-ASG/H-YH)

Editor: Priyambodo RH
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