OJK Predicts Banks' Profit Could Drop 40% This Year
Translator
Ririe Ranggasari
Editor
Laila Afifa
Rabu, 2 September 2020 23:13 WIB
TEMPO.CO, Jakarta - The Financial Services Authority or OJK predicted that Indonesian banks' profits by the end of the year will decline by 30 to 40 percent compared to last year.
"If we look at the current conditions, it is still profitable, but it has decreased by 30 to 40 percent," OJK Board of Commissioners chief Wimboh Santoso said during a meeting with the House of Representatives' Finance Commission, Wednesday, September 2.
The banking sector's profit decline has been seen in the second quarter of 2020. From April to June, profits before taxes were recorded to have decreased by 19.8 percent from last year.
According to Wimboh, the profit decline was understandable because of the large number of credit restructuring due to Covid-19. "We estimate that, by the end of the year, bank profits will decline, the range is 30-40 percent," Wimboh said.
He also said that he had met with a number of banks' CEOs. From the conversations, he said that the decline in profit was inevitable. "However, we see there is still hope."
Based on the latest OJK data, the sector's equity is quite strong at 23 percent. Wimboh said that the figure was sufficient to support a sizeable growth in credit.
Read: OJK Asks Banks to Take 4 Steps to Curb Covid-19 Impacts
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