Minimum Capital Adequacy Ratio (CAR) for General Banks Increased by 24.58% in July 2021

The Minimum Capital Adequacy Ratio (CAR) of conventional commercial banks increased by 28 basis points (bps) to 24.58% in July 2021 from the previous month (month-to-month/m-to-m).

This increase was driven by a 0.98% rise in the capital of conventional commercial banks to Rp 1.41 quadrillion from the previous month (m-to-m). Meanwhile, risk-weighted assets (RWA) decreased by 0.16% to Rp 5.75 quadrillion from the previous month (m-to-m).

Compared to July 2020, the CAR of conventional commercial banks also increased by 155 bps (year-on-year/yoy). This increase was supported by a 6.11% (yoy) increase in bank capital. Meanwhile, bank RWAs decreased by 0.59% (yoy).

Compared to December 2020, the minimum capital adequacy ratio of conventional commercial banks increased by 69 bps (year-to-date/ytd). This increase was driven by a 3.96% (ytd) increase in bank capital, while bank RWAs only increased by 1.05% (ytd).

The CAR of conventional commercial banks shows an upward trend during the pandemic, along with a decrease in RWAs. This CAR is well above the stipulated threshold of 8% for measuring bank health.