Indonesia's Banking Sector NPLs are Relatively High in ASEAN

Indonesia's national banking non-performing loan (NPL) ratio reached 3.2 percent in 2016, an increase from 2.5 percent the previous year. Compared to other Southeast Asian countries, Indonesia's banking NPL is relatively high. However, compared to India's bad loan ratio, domestic bank NPLs are significantly lower.

Singapore's banking NPL ratio reached 1.4 percent in 2016, up from 1 percent the previous year. Meanwhile, Malaysia's banking NPL reached 1.8 percent, up from 1.6 percent the previous year.

The sluggish domestic economy, impacted by the global economic slowdown, led to an increase in domestic commercial banks' non-performing loans, while credit growth and third-party funds (DPK) growth slowed. In 2016, the national commercial banking NPL reached 2.93 percent.