Board of Commissioners Chairman of the Financial Services Authority (OJK) Wimboh Santoso highlighted that the performance of various indicators of the financial services sector increased in the second quarter of 2021.
“Thus, in general, the financial services sector is in a stable condition,” Santoso noted at a press conference of the Financial System Stability Committee here on Friday.
He explained that the condition of financial services’ capital was favorable, as reflected by the banking industry’s capital adequacy ratio (CAR) of 24.33 percent in June 2021, increasing from 24.28 percent in May 2021 and the financing companies’ gearing ratio by 2.03 folds, well below the maximum limit.
Moreover, Santoso noted that the strong capital condition of financial services institutions was also apparent from the general and life insurance industries’ risk-based capital (RBC), recorded at 647.7 percent and 314.8 percent, respectively, far above the minimum threshold.
According to Santoso, the liquidity adequacy in the banking industry was satisfactory to support intermediation, presented by liquid/non-core deposit instruments and third-party funds (TPF) as of June 2021 of 151.20 percent and 32.95 percent, respectively.
Excess liquidity in state securities amounted to Rp1,391.98 trillion in June 2021, or 14.79 percent of the total assets, an increase of 1.19 percent as compared to December 2020, he stated.
Furthermore, he observed that banking intermediation demonstrated an increase in maintained credit risk, as was apparent from June 2021’s banking credit that increased by Rp67.39 trillion from the previous month, clocking a 0.59-percent positive growth on an annual basis (yoy), or 1.83 percent year to date (ytd).
“This continues the improving trend in the last quarter, followed by credit interest rates, with a downward trend of 43 basis points as compared to March 2021 in line with the recovering economic performance in the second quarter of 2021,” Santoso remarked.
Nevertheless, he noted that TPF recorded a high growth of 11.28 percent (yoy) in June 2021 in line with the accommodative fiscal policies and liquidity enhancement in the monetary sector.
However, he stated that the one-month deposit rate was recorded at 3.47 percent in June 2021, as compared to 3.74 percent in March 2021, indicating that the benchmark interest rate policy had been gradually transmitted to the bank’s interest rate policy.
Meanwhile, he noted that the credit and financing risk profile of financial services institutions in June 2021 was maintained, with the Non-Performing Loan (NPL) gross ratio improving to 3.24 percent as compared to the previous month.
Furthermore, the Non-Performing Financing (NPF) ratio of financing companies improved to 3.96 percent, below the five-percent threshold, according to Santoso.
Source: Antara News