Growth of banking credit can reach 14 percent in 2019: OJK

Growth of banking credit can reach 14 percent in 2019: OJK

Chief Commissioner of the Financial Service Authority (OJK) Wimboh Santoso (Antara foto/Indra A Pribadi)

Jakarta,  (ANTARA News) - The Financial Services Authority (OJK) has set a target of 12-14 percent (year on year / yoy) for bank credit growth for 2019, a target that is quite optimistic considering the easing pressure from global economic uncertainty.

OJK Board of Commissioners Chairman Wimboh Santoso at the annual meeting in Jakarta on Friday night said that with reduced global economic pressure this year, capital inflows would intensify and encourage the flow of banking liquidity.

With credit growth at 13 percent plus minus one percent, the OJK also projects the growth of Third Party Funds (TPF) or deposits of banking funds to reach 8-10 percent (yoy).

"While the ratio of non-performing loans (NPL) trends is likely to continue to decline, we expect it to be below two percent this year if the domestic economy gets better," he said.

Reflecting on 2018, credit growth is indeed quite aggressive despite the pressure of the global economy being strong. This is because the demand for credit, especially from the infrastructure sector, continues to stretch.

In 2018, banking industry credit grew 12.9 percent (yoy). Meanwhile, Third Party Funds (TPF) of banks in 2018 are estimated to grow by around eight percent.

"We predict the performance of the financial sector intermediation in bank credit growth will be in the range of 13 plus minus one percent," he said.

The easing of global economic pressure this year is due to plans for the US Federal Reserve`s interest rate hike, which will not be as aggressive as in 2018.

"The pressure from the Fed will not be like it was in 2018. Then, there is a positive trend for the domestic economy. The domestic economy is expected to grow 5.3 percent with inflation maintained relatively low at the level of 3.5 percent," Wimboh said.

Optimism is also evident from banking players as reflected in the 2019 Bank Business Plan (RBB), which targets credit expansion and Third Party Funds of 12.06 percent and 11.49 percent, respectively.

Reporting by Indra Arief Pribadi, eliswan Azly
Editing by Suharto
 

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