The banking sector fundamentally fit in the face of challenges – Economy

Rully Arya Wisnubroto (Mandiri Bank) (The Jakarta Post)

PREMIUM

Jakarta ●
Tue, September 14, 2021

During the second quarter of this year, Indonesian banks recorded a very good income performance. The combined net profit of the six largest Indonesian banks reached 46.7 trillion rupees ($ 3.27 billion), a significant increase of 19.7% over the previous year, thanks to the increase in net income of interest which also increased by almost 20% to reach 129.9 trillion rupees. The improvement in bank profitability came after the national economy rebounded strongly from a recession in the second quarter.

Yet banks still face many challenges, especially the economic impacts of tighter social restrictions to curb the spread of the more infectious variant of COVID-19, the Delta.

There are signs of slowing loan growth and weakening asset quality. Loan growth in July slowed to 0.5% on an annual basis from 0.6% in June. And at the same time, the ratio of troubled assets rose to 3.4% from 3.2%.

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