BII lowers credit growth target to 18-20 percent

JAKARTA. Bank Internasional Indonesia (BII), one of the nation’s top 10 banks, has lowered its 2013 credit growth target to 18-20 percent from 22 percent.

“Indonesia’s macro economy condition has forced us to lower the credit growth target from 22 percent to 18-20 percent,” said BII president director Khairussaleh Ramli when explaining BII’s performance in Jakarta on Monday.

In the first half of 2013, Indonesia’s economy grew 6.1 percent from the 6.3 percent forecast in the state budget

Moreover, he said, the threat of high inflation following the recent increase in subsidized-fuel prices was predicted to affect credit channeling by the banking sector.

“Apart from the macro condition, inflation and the increase of Bank Indonesia’s (BI) benchmark interest rate are also important factors in our considerations to lower the credit growth target,” said Khairussaleh.

BI increased its benchmark interest rate by 75 basis points in July in anticipation of rising inflation.

From January to June, BII channeled Rp 85.1 trillion (US$9.4 billion) worth of credit, up 16 percent from Rp 73.5 trillion in the same period of 2012.

Business banking credit for commercial and small and medium businesses has the highest growth rate, increasing 29 percent to Rp 30.2 trillion from Rp 23.5 trillion, compared to other retail credit, which increased 16 percent from Rp 26.7 trillion to Rp 31.1 trillion.

Meanwhile, the bank’s global banking credit was recorded to have grown only 2 percent from Rp 23.3 trillion to Rp 23.9 trillion.