RETAIL BANKING | Tony Chua, Indonesia

Indonesian lenders among the most resilient

A Deutsche Bank report said the country’s banks can weather recessionary risks and severe shocks to the international banking system.

Indonesian lenders are among the world’s most resilient to a global financial crisis, while their high profitability and prospects for further expansion are appealing to investors, according to a new study.

Deutsche Bank said in a recent report that Indonesia’s banks were some of the world’s sturdiest in difficult times. The investment bank measured Indonesian banks using nine key risk factors, including macroeconomic and systemic risks. 

The outcome, according to the Germany-based bank, was that “Indonesia’s banks are well placed to withstand recessionary risks and severe shocks to the international banking system.” 

“With relatively low levels of credit in the Indonesian economy and high levels of bank capitalization, we expect Indonesia to benefit from good access to credit for a number of years to come,” the bank said. 

On a scale of risk — out of 45 and with a lower value indicating lower risk — Indonesia scored 19, placing it third among emerging market nations after Mexico and Thailand, which scored 17 and 16, respectively. 

Among developed markets, Greece and Portugal both scored 33, while Spain and Ireland had 32. France scored 24, the United Kingdom had 23 and the United States 22. 

View the full story in Jakarta Globe.

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