CIMB Niaga acknowledges a significant decrease in housing loans due to Bank Indonesia's new loan-to-value policy.
So The bank has channeled only Rp 200 billion or US$20.86 million in monthly housing loans since the increase minimum loan-to-value ratio from 80 percent to 70 percent.
“Despite the decrease, we fully comply with the LTV rule. We support the rule because it increases the healthiness of credit portfolio of domestic banks,” according to CIMB Niaga’s head of consumer lending, Tony Tardjo.
Although there were fewer housing sales from July to September due to Ramadhan, the impact of the LTV policy was actually “quite significant” to CIMB Niaga.
He noted that Indonesians held back from purchasing new homes due to the high level of minimum down payment.
The increased minimum down payment was meant to slow down booming consumer loans, specifically on housing and automotive, that grew by more than 32 percentin 2011, exceeding the overall 24.9 percent loan growth.
The central bank argues that the policy is necessary to avoid a bubble in the property sector.
Housing loans compose almost half of CIMB Niaga's consumer credit portfolio.
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