Bank Credit Disbursements Increase by 7.76% as of June 2023, Non-Performing Loans Decrease

The Financial Services Authority (OJK) reported that the disbursement of general bank loans to third parties or the public reached Rp6.656 trillion (Rp6.65 quadrillion) in June 2023. This figure grew by 7.76% year-on-year (yoy) compared to June 2022, which was Rp6.177 trillion.

This figure also increased by 1.18% month-on-month (mom) from the previous Rp6.577 trillion recorded in May 2023. The loan value in June 2023 was the highest in the last year.

On the other hand, non-performing loans (NPLs) or bad loans in June 2023 were recorded at 2.44%. This figure is significantly lower than June 2022, which reached 2.86%. The highest NPL in the one-year period was recorded in July 2022, reaching 2.9%.

Problem loans are measured by their collectibility, mainly using the criteria of substandard, doubtful, and bad loans. Banks calculate the percentage of problem loans against the total loans they have disbursed.

Quoting Kumparan.com, Dian Ediana Rae, Executive Head of Banking Supervision at OJK, stated that the banking sector remains resilient. This is because the intermediation function remains maintained and supported by adequate capitalization.

"With the highest growth in investment credit at 9.6%. By ownership type, the highest growth in credit for state-owned banks is 8.3%," said Dian in a virtual press conference on the results of the July 2023 Monthly Board of Commissioners Meeting (RDKB) on Thursday (3/8/2023).

The balance between financing growth and banking liquidity must not be imbalanced. Dian mentioned that banking industry liquidity is currently at an adequate level, and its liquidity ratio remains maintained.

"The ratio of liquid assets to non-core deposits (AL/NCD) and AL/DPK decreased to 119.05% and 26.73%, respectively, far from the thresholds of 50% and 10%," said Dian.

(See also: Recovering from the Pandemic, Banking Credit Grew 11.35% at the End of 2022)