LENDING & CREDIT | Tony Chua, Indonesia

Indonesia bank loans soar by 58%

Growing demand from companies and low borrowing costs in Indonesia boosted loan growth.

Banks in Indonesia are extending the most credit on record, spurred by central bank policy and rising demand from companies investing in an economy forecast to expand faster than the rest of the region.

Syndicated loans in South-east Asia's biggest nation total US$8.4 billion since January, a 58 per cent jump from the same period of 2010.

London-based HSBC Holdings plc almost doubled its share of the market to 12.3 per cent, overtaking seven other lenders to take the top spot ahead of PT Bank Mandiri, which has helped arrange 48 per cent more loans than this time last year.

Bank Indonesia's policy of fining lenders with loan- to-deposit ratios below 78 per cent is fuelling growth in an economy one step away from its first investment-grade credit rating since it was downgraded to junk during the Asian financial crisis in 1997.

PT Adaro Energy, the country's second-biggest coal miner, and PT Berlian Laju Tanker, its biggest shipper, are borrowing as loan costs have fallen by about 1.5 percentage points over the past 12 months, according to Bank Mandiri, Indonesia's biggest lender by assets.

View the full story in Business Times.

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