September 2006
Indonesia: The call to consolidate
Despite a cyclical downturn – which has itself prompted the country’s banks to sharpen up their operations – the sector is in unprecedented good shape. But the banks need to be encouraged to lend more, and this is in part dependent on the consolidation a newly powerful central bank is keen to promote. Nick Parsons reports from Jakarta.
The ironies of Indonesia
Indonesian banks’ lending growth and profits fell in the first half of the year. But that should only be a short-term story. Taking the longer view, the banking sector – like the overall economy – is looking very encouraging.
Certainly that is what international investors have thought this year. They have reaped rich rewards from the stock market, the currency and government bonds, on the back of their growing faith in the stability of the Susilo Bambang Yudhoyono government and its reform drive.
This is despite the fact that the economy has stuttered along at a declining growth rate of barely 5%.
The same dichotomy can be found in the banking sector. Loan growth slowed to 3.75% in the first half – compared with a staggering 24% surge in 2005 – and banks have posted invariably poor results for the period, largely because of rising fuel prices, growing inflation...
You must be a Level 2 subscriber to access this archived content.
If your subscription includes access to the archive, please log in now to view.
To gain access to this content visit the subscription page or call our hotline on +44 (0)207 779 8999.
Subscribe online now and save up to 30% on your subscription.
If you are a trialist or subscriber, please enter your username and password at the top right-hand side of euromoney.com
Subscribers to Euromoney benefit from:
Level 1:
- Online access to the past 12 months content
- Tailored RSS news feeds direct to your desktop
- News delivered directly to your mobile device or PC
- Personalised email newsfeed of 'Top stories' and 'Breaking news'
Level 2:
- Exclusive access to euromoney.com - Read the latest issue early online, search for specific developments by region or sector, interrogate the results of Euromoney's benchmark polls, and view the archive dating back to 2000
- 12 monthly issues of Euromoney magazine
- More than 30 specialist research guides free
- The results of Euromoney’s polls and surveys
- Tailored RSS news feeds direct to your desktop
- News delivered directly to your mobile device or PC
- Personalised email newsfeed of 'Top stories' and 'Breaking news'
Click here to subscribe