Bank Non-Performing Loans Continue to Rise

The sluggish domestic economy has led to a tendency for non-performing loans (NPLs) in the banking sector to increase, while credit growth and third-party funds (DPK) growth have tended to slow. In 2016, national NPLs for general banking reached 2.93 percent, up from 2.49 percent the previous year. In fact, banking NPLs in January 2017 had reached 3.09 percent, or approximately Rp 133.31 trillion, out of a total of Rp 4.31 quadrillion in credit extended to third parties.

Non-performing loans for working capital in 2016 reached 3.59 percent (Rp 73.59 trillion), the highest compared to investment credit at 3.21 percent (Rp 36.12 trillion), and consumer credit at 1.53 percent (Rp 18.42 trillion). Meanwhile, according to their intended use, non-performing loans for exports reached 2.13 percent (Rp 2.1 trillion), and for imports 2.66 percent (Rp 1.19 trillion), while other credits amounted to 2.95 percent (Rp 129.36 trillion).

Credit growth throughout 2016 only reached 7.87 percent, lower than the previous year. Similarly, DPK growth was only 7.26 percent, also lower than the previous year.