Indonesian banks raise loan growth target to 23.8% this year

Indonesian central bank (Bank Indonesia) Deputy Governor Muliaman Hadad said domestic banks are more optimistic to face the country's economic condition this year, which prompts them to set loan target at 23.8 percent, the Bisnis Indonesia reported here on Friday.

The target is higher than the central bank's initial estimation -- a range of 17 percent to 20 percent,

The banks' increasing loan growth target may spur the country' s economic growth, exceeding 5.5 percent targeted by the Bank Indonesia (BI) this year. Because of this, the BI has increased its economic growth estimation into a range of 5.5 percent to 6 percent this year, Muliaman said.

Muliaman added that the bank's optimism was based on their improving expectation on the condition of national economic this year.

"They (domestic banks) regard that the ongoing improving recovery in global economies would positively affect Indonesia," Muliaman said on the sidelines of a banking discussion held here on Thursday.

Besides that, Indonesian banks are also predicted to receive more funds from their depositors which BI predicted that the banks' third party's fund (TPF) ratio will increase 14.9 percent this year.

The BI learned that banks' loans has grown to 1,417.8 trillion rupiah (about 154.3 billion U.S. dollars) as of January this year, or 10 percent higher than that in the corresponding period last year -- 1,289.8 trillion rupiah (about 140.4 billion U.S. dollars).

Source:Xinhua