Indonesia financial regulator revises down 2016 loan growth outlook

[JAKARTA] Indonesia's Financial Services Authority (OJK) has revised down the outlook of commercial banks' loan growth for 2016 to 6-8 per cent, from 7-9 per cent, its chairman said on Monday.

Bank loans in Indonesia in August grew 6.83 per cent from a year earlier, data showed, the slowest since November 2009 and very low compared with historical trends.

Bad loans have been rising, prompting banks to increase provisions which have squeezed profits. "Banks' capacity to absorb risks of losses is strong, it's reflected in banks' capital adequacy ratio which reached 23 per cent (in August)," Muliaman Hadad told a joint news conference with the central bank and the finance ministry.

REUTERS