The Jakarta Post | Tue, 02/24/2009 8:12 PM
The Indonesian Central Bank (BI) revealed Tuesday that the state of national banking is generally good and will be strong enough to endure the repercussions of the global financial meltdown because of sizeable capital and sound credit.
"Generally, the banking situation is sound enough to withstand the crisis due to a high capital-to-asset ratio (CAR) and also low nonperforming loan (NPL) rates, as well as fund liquidity," BI director of banking research and regulation Halim Alamsyah said, as quoted by state news agency Antara.
He added that the results of the reports, including foreign exchange loans, up until January, were solid.
"Several banks are indeed troubled due to foreign exchange transactions, however, in general those banks have sufficient capital buffers and high reserves," Alamsyah said.
According to Halim, BI is predicting a low NPL rate, though the results of this will not be available until the second semester, or next June.
"We are predicting the gross NPL rate to increase above 5 percent, but won't surpass 6 percent in June," Alamsyah said. (amr)
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