JAKARTA. This year, the net interest income (NIM) of banks remain high, despite of the decrease in the interest rate.
According to the statistics of the Financial Service Authority (FSA), the NIM of banks stood at 5.65% as of September 2016. This was the highest NIM recorded during the last four years. The highest NIM of Indonesia’s banking was 6.32% during the end of the year of 2011.
The increase in the NIM is likely to be caused by the slow compensation of credit growth. As of September 2016, credit only grew by 6.34%.
Economist of the Deposit Insurance Agency (LPS) Ariefianto Doddy said that the NIM has risen until the third quarter of 2016 due to a decrease in deposit interest rate, which was much faster than the credit rate. The deposits interest rate had dropped by almost 150 basis points (bps) during 2016, while the credit rate only fell by 100 bps.
According to the research of KONTAN, the NIM of Indonesia’s banking is higher than other South East Asia countries. For an example, the Bank of Thailand said that the NIM of Thailand’s banking stood at 2.6% by the end of third quarter of 2016.
Meanwhile, VietinBank, which is the bank with the largest assets in Vietnam only booked a 2.85% NIM.
Bank Negara Malaysia (the Central Bank of Malaysia) on its website does not mention the ratio of banking NIM in Malaysia. However, in average the banking credit in Malaysia stood at 4.55%.
The NIM’s growth
As the largest bank in Indonesia, Bank Mandiri secured a 77 bps increase in the NIM to 6.4%. President Director of Bank Mandiri Kartiko Wirjoatmodjo said that the increase was caused by the settlement of a major non-performing loan (NPL).
Unfortunately, Kartiko was still reluctant to give detail information about the NPL’s settlement. However, without the settlement, the NIM of Bank Mandiri will only left around 6%,” said Tiko.
Conversely, Bank Negara Indonesia (BNI) as of the third quarter of 2016 booked a decrease in NIM by 40 bps from the previous year to 6.22%. This was caused by the payment of interest income in the third quarter of 2016, said Corporate Secretary of BNI, Ryan Kiryanto.
Ryan predicted that the BNI’s NIM will continue to decline, due to the potentials of the decrease in interest rate in the next year. BNI will anticipate this by increasing the cheap funds through optimizing branch offices and technology.
Meanwhile, Bank Permata booked a slight decrease in NIM by 1 bps to 3.95% in the third quarter of 2016. President Director of Bank Permata Roy Arman Arfandy said that in the furure Bank Permata will adjust the deposit interest rate and increase the fee based income.
(Muhammad Farid/Translate)
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