Eight Bank Increases Rates

No More Problems in Banking Liquidity
Thursday, January 28, 2010 | 02:31 pm 

Jakarta, Kompas - the international agency Fitch Ratings raised ratings of eight banks in Indonesia from BB to BB +. this shows, the first quarter of 2009 despite the world situation is still not recovered from the crisis, the financial performance of banks in Indonesia is quite good. 

Eight banks increased their ranking by Fitch Ratings on Wednesday (27 / 1), the Bank Mandiri, Bank Rakyat Indonesia, Bank Central Asia, Bank CIMB Niaga, Bank Danamon, Bank Internasional Indonesia, Bank NISP OCBC and UOB Bank Buana. 

Earlier, on January 25th, the same institution to raise the rank of Indonesia `s debts in foreign currency, from BB to BB + with stable outlook. 

"This ranking reflects the increase in endurance in the midst of the financial performance of operating conditions more difficult, especially in the first quarter of 2009," said Director of Financial Institutions Group Fitch Ratings Tan Lai Peng in Jakarta. 


He explained that the increase was ranked according to Fitch Ratings' expectations that the improvement of banking in Indonesia will continue because the macro economic outlook is stronger in 2010. Although ranking these banks rose, Tan admitted that the quality of loans in almost all banks in 2009 decreased. This decline is expected to continue in early 2010. However, Tan believes, operating conditions are better this year will support the credit quality and profitability in the future. In the midst of political criticism 

According to analysts of capital markets and banking, Mirza Adityaswara, Indonesia increase state rank reflects the trust of international agencies on macro economic conditions of Indonesia. In 2009, Indonesia one of the few countries in the world that have a positive economic growth, which is 4.3 percent. This year, Mirza said, Indonesia's economic growth could be supported by 5,3-5,7 percent with a large population, heavy reliance on exports is relatively low, a healthy banking system, as well as fiscal policy and financial authorities to be careful. 

"So, in the midst of criticism against the government some politicians, turned out to agencies such as Fitch Ratings gave praise to raise the ratings of Indonesia and Indonesian banks," said Mirza. Related increase in the ranks of eight banks with liquidity, Mirza said, since the 2009 third quarter, is no longer a problem of liquidity in the domestic banking system. 

The flow of credit in this year, according to Mirza, will depend on the demand for credit and real sector activity for bank loans that have not been distributed is still quite large. 

Should, go Mirza, real sector activity in this year may be in line with the improvement of the global economy and the domestic economy. Thus, loans from banks that have not been distributed can be used by employers. (REI)