Banking
From The Report: Indonesia 2015
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The Indonesian banking sector continues to strengthen after a lengthy period of expansion. Business remains sound with sufficient capital to support credit growth, and the regulatory environment setting up the industry for further expansion. Questions about consolidation and foreign participation remain, and the structure of the sector going forward is a matter of debate. Economic concerns also hang over the banks, but participants are confident the institutions themselves are sound. As long as Indonesia continues to refine its laws to encourage competition, the sector should remain on the course it has charted for a decade and become more inclusive.

This chapter contains interviews with Sumit Dutta, CEO, HSBC Indonesia; Jahja Setiaatmadja, CEO, Bank BCA; and Budi G Sadikin, President-Director, Bank Mandiri.

Articles from this Chapter

Overview

Indonesia working towards inclusive and efficient financial services
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The Indonesian banking sector continues to strengthen after a lengthy period of expansion. Business remains sound with sufficient capital to support credit growth, while the regulatory environment is benign and supportive, poising the industry for further expansion. Indonesia is the most populous nation in the ASEAN bloc, and has a great number of people without bank accounts as well as a fast-emerging middle class. Banks are set to grow as inclusivity improves and increasingly wealthy and sophisticated…

Interview

Sumit Dutta, CEO, HSBC Indonesia: Interview
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Interview:Sumit Dutta What measures should Indonesia implement to harness its growth potential going forward? SUMIT DUTTA: Indonesia is already one of the fastest-growing markets in the world. In terms of GDP growth in the last decade, Indonesia ranked third after China and India. By size of the economy, of the G20 countries Indonesia ranked 16th, with China, Japan, India and South Korea the only Asian countries to rank ahead of it. As I have said before, Indonesia is too big to ignore and…

Analysis

Financial services in Indonesia achieve greater reach on the internet
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With JPM organ Chase & Co recently advising traditional global bankers that “Silicon Valley is coming”, and Goldman Sachs estimating that the disruptive newcomers of the financial technology segment (FinTech) attracted $12bn in investment worldwide in 2014 – up from $4bn in 2013 – a new era in finance is beginning. This global trend has not passed Indonesia, either. Indeed, a string of innovative financial products from the country’s finance start-ups is now circumventing the traditional…

Interview

Jahja Setiaatmadja, CEO, Bank BCA: Interview
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Interview:Jahja Setiaatmadja How might the lack of liquidity affect Indonesia’s GDP growth moving forward? JAHJA SETIAATMADJA: This is a very important issue at this particular moment for Indonesia’s banking sector. We have to keep a close eye on the level of liquidity because it is running short, and this can have a big impact on our whole economy. In fact, we are already seeing GDP growth levels being affected by the lack of liquidity. We are seeing numbers around 4.7%, which is far…

Analysis

Preparing Indonesia’s banking sector for new legislation on foreign ownership
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For most of its history, the Indonesian banking sector has been highly regulated, with the government often intervening in a heavy-handed manner to achieve policy goals and correct larger economic concerns. The results have been mixed, with the authorities erring at times on the side of too much control and at other times on the side of too much freedom, with some of the reforms of the 1980s and 1990s having weakened the sector ahead of the 1997-98 crisis. However, since the crisis of the late 1990s,…

Interview

Budi G Sadikin, President-Director, Bank Mandiri: Interview
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Interview:Budi G Sadikin Can Indonesia’s banks boost micro, small and medium enterprise (MSME) lending while preventing non-performing loan (NPL) levels from growing? BUDI G SADIKIN: The MSME segment plays a significant role, as it encapsulates 99% of all businesses in Indonesia and often serves as the propeller of the economy. In addition, the government is trying to boost credit to MSMEs so that they will have a higher contribution to national growth. In our view, the risk of the MSME…