Banks Predicted New Loan Growth To Accelerate In The Second Quarter Of 2019 - Bank Sentral Republik Indonesia
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September 16, 2019

The latest Banking Survey conducted by Bank Indonesia in the first quarter of 2019 revealed how credit growth has slowed in line with seasonal trends at the beginning of the year, and predicted to accelerate in the second quarter of 2019. The slowdown was reflected by a decline in the weighted net balance (WNB) of demand for new loans to 50.0% from 71.7% in the previous period, held back primarily by working capital loans and investment loans. Nevertheless, the survey respondents expected growth of new loans to regain momentum in the second quarter of 2019, in line with stronger economic growth, milder credit risk, and ample liquidity.

Respondents also expected the increase of new loans disbursed by the banking industry in the second quarter of 2019 to be accompanied by looser lending policy, as indicated by a decrease in the Lending Standards Index to 12.4% in the second quarter of 2019 compared with 13.6% in the previous period. The banks expected to loosen lending standards on consumer loans, and lower administration fees and maturity restrictions aspect.

The Survey also showed that respondents were still upbeat on overall credit growth in 2019.  Accordingly, the respondents predicted credit growth in 2019 to reach 11.6%, with the optimism driven by economic growth momentum in 2019 and relatively low credit risk.

The complete survey result is available in the Banking Survey on the website of Bank Indonesia

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