Japanese and Korean companies are aggressively buying and acquiring banks in Indonesia. However, banking and financial institutions from the two have different targets.
The large increase in the net profit of state-owned banks in 2017 was mostly supported by declining reserve costs, despite sluggish growth of lending as their main business.
This year’s mutual funds trend is for passive management funds, as mutual funds are considered more appropriate in this political year because they produce stable profits.
The merger of BTPN and Bank Sumitomo Mitsui has created a bank with immense assets that is now one of the top 10 largest banks in Indonesia.
The Salim Group and Sjamsul Nursalim affiliate Mitra Adiperkasa plan to move into the hugely potential electronic payment business this year.
Major banks issue debt instruments that can be converted into capital to anticipate risk of financial crisis, as obligated by OJK.
Bank lending rate decline followed fall in deposit rate, but small banks are overwhelmed competing with large banks with large liquidity to attract debtors.
The government and OJK are promoting green bonds as a funding source for infrastructure development, but the investor base here is still limited.
President Jokowi has called on regional governments to be more creative about seeking sources of funding. Regional bonds are a potential option to help finance infrastructure development.
The government is encouraging banks to step up credit provision. Solid micro financial service indicators and liquidity easing have driven credit growth towards double figures.