chapter 5 strengthening financial system infrastructure

Publisher:

Bank Indonesia

Information and Orders:

Bank Indonesia

Financial Stability Review (FSR)“to safeguard the stability of the Indonesian

Rupiah by maintaining monetary and system stability for sustainable

development”.

MACROPRUDENTIAL POLICY DEPARTMENT

“Strengthening Financial System Stability Amidst Onerous

ii

“Memperkuat Stabilitas Sistem Keuangan

iii

Foreword .......... ............................................................................................................................................................... ix

.......................................................................................................................................................... xiii

................................................................................................................................ 3 .............................................................................................. 3

................................................................................................................... 8 ...........................................................................................................

.................................................................................................................... ............................................................

...................................................

........................................................................................................................................... ...................................................................................................................................

.................................................................................... ...................................................................

............................................................................................ ...............................................................................................

...........................

........................................................................................................................ ........................................................................................................................

............................................................................................................................. ......................................................................................................

................................................................................................................................... 73

............................................................... 77 ......................................................................................................................................... 77

........................................................................................................... ..............................

........................... .......................

............................................................................................... ......................................................................................................................

................................................................................................... ............................................................................................................................

................................................................................................. ...............................................................................................................................

...........................................................................

...................................................................................................................................................

..................................................................................... ............................................................................................................

......................................................................... ..............................................................................................................................................

................................................................................................

............................................................................................................................................................... ...........................................

....................

Table of Contents

List of Tables, Graph and Figures

Tables1.1.

................. 21 ................................. 22

........................................................ 342.2.

......................................................... 34 ............. 37

........................... 402.5. 42

................ 42

3.1. ................................ 58

3.2. ................................................ 58

............................... 593.4. ....................................... 61

......................................................... 63

.............................. 64 ............ 66

............. 66

.............................................................. 67

............ 68... 73

...................... 78 ............................... 79

........................ 80 ............. 80

......................... 80 ............ 81

........ 83 ............... 83

4.9. 84 ........................................ 85

................................ 86................................................. 88

.................................................. 88

.............................................................. 89 ................. 89

.............................................................. 90

............................................................. 904.18. 91

...................... 91 ............................... 92

............... 98

........................................ 100

............................. 101

....................................................... 102

.................. 113 ...... 116

............................................................. 127 ......... 132

Graph ..... 4

............ 5 ....... 5

............................ 6

.......................................................... 61.7. .................. 7

...................... 7 .......................... 7

............... 7

.................................................. 8

.................................................. 8 ............................................. 9

1.14. ....................... 9 .............................................. 9

................................................... 10 ....................... 11

1.18. ............................................ 11

............................ 12 ......................................... 12 ......................................... 12

1.22. .. 13 ..................... 13

1.24. .............................................................. 13

...... 14 ........... 15

..................... 161.28.

............................................... 161.29.

................................................ 171.30. .............. 18

................. 19 ... 20

...................................................... 20 ............. 21

....... 29 30

..................... 30

....................... 30 ...... 30

..................................................... 31 .... 31

.................. 31

......................................................... 31

32

....................... 32 ......... 32

............................... 33 ... 33 ... 33

2.16. 33 ........ 33

.................................................... 34 .......................................................... 34

..................................... 35 ............................ 35

.................. 35 .......... 35

2.24. 35 ............................ 36

.................................. 36 .............................. 36

....................................... 36

................................................................. 37

............................ 37 ............................. 37

..................... 38 .......... 38

........................ 38 ....................... 38

............................ 39 ...................................... 39

............... 40 ................................... 41

.......................................... 41 ................................. 41

............................... 44 ....................................... 44

Graph ..................... 44

............................................ 44 ..................... 44

................................................... 45 ........................... 45

............................................................. 46 ................... 46

............................................................. 47

............................................................ 48

...................................... 55 ..................................... 56

.............................. 56 .......................................... 57

.................... 57 .......................... 57

.......... 58 .......................... 59

....................... 60 ...................................... 60

................. 60 .......................... 60

............................ 613.14. ......... 61

. 61 ...... 61

............... 62

.......................................................... 62 .......................................... 62

.......... 63

.............................. 643.23. 65

... 65

.......................................... 65 ............ 66

... 67 ................ 71

......... 7172

................................ 72 ................................ 72

74

................................................... 78

78 ...................................... 79

4.5. .............. 79 ......................... 80

4.7. ........................................................... 81

.............................. 81................................................... 82

.............................. 82 ............................. 82

.................. 82 .......................... 83

......................... 84 ............................ 85

................ 85 ........................ 85

.. 86

.......................................... 87 ......................................................... 89

4.22. 904.23. ............................................ 92

.............. 92 .................................................... 92

................... 934.27. ...................... 944.28. ............................. 94

................. 94 ............................. 95

................. 95 ..................................... 95

...................... 95 ...................................... 96

.................. 96 ................................... 96

4.37. FC Financing ..................................................... 96 ..................... 97

........................ 97 .............................................. 97

.... 97 ... 98

4.43. ..... 98 ..... 98

99..................... 99

.............................. 99 ..................... 100

vii

Graph4.49. 100

Companies ....................................................... 1014.51. RBC at Public listed Insurance Companies in 2013 and 2014 ............................................. 102

Stress Case ........................................................ 103 ..................... 103

Deposits ........................................................... 104Box Graph 4.3.1 Bank Interconnectedness Nonbank

.................... 107Box Graph 4.3.2 Bank Interconnectedness with Five

in Indonesia ...................................................... 107Box Graph 4.3.3. Interconnectedness Bank and Non

....... 108Box Graph 4.3.4. Interconnectedness Bank and Non

.......... 108

with NBFI ......................................................... 108

. 114 .............. 114

.......................... 115................... 115

.............. 117 .. 117

in December 2014 ............................................ 118

6.1. Credit Growth................................................... 1296.2. Deposit Growth ................................................ 129

............................ 129 ............ 132

132

Glossary

ix

th

Foreword

x

Agus D. W. Martowardojo

th

xi

Summary

1

Chapter 1. Financial System Stability

Financial System Stability 1

2


3


1.1 GLOBAL AND DOMESTIC FINANCIAL MARKET RISKS

Chapter 1 Financial System Stability


GovernmentBonds (bps)

5 - year CDS (bps)

Stock Index(%)

Exchange Rate

sem-to-sem

Negara Maju

UnitedStates

(36) 1.27 5.92 -

UK (91) 2.57 (2.64) (8.50)

Japan (24) 30.18 15.09 (15.13)

Germany (70) (2.58) (0.28) (12.33)

Emerging Markets in East Asia

Advance Countries

China (44) 9.33 57.92 (0.04)

Hong Kong (14) 1.79 (0.05)

Indonesia (42) (0.68) 7.14 (4.28)

South Korea (57) 0.50 (4.33) (7.25)

Malaysia 10 20.51 (6.45) (8.19)

The Philippines 20 3.83 5.64 (2.38)

Singapore (4) 3.36 (5.55)

Thailand (107) (10.64) 0.80 (1.50)

Sumber: Bloomberg

Yield of 10 - year

(%)

sem-to-sem sem-to-sem sem-to-sem

Turkey

0 50 100 150 250200

Brazil

Indonesia

Philippines

Thailand

Malaysia

China

Japan

Germany

US

31-Dec-14 30-Jun-14

5


South Korea

0

2

4

6

8

10

12

14

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4*

2010 2011 2012 2013 2014

INDIA INDONESIA

%

India Indonesia China Turkey

2014 2015 2016 2017 Longer run

Percent

5

4.5

4

3.5

3

2.5

2

1.5

1

0.5

0


0.00 5.00%

THBPHPIDRINR

CNYKRWSGDMYRTRYZARBRLJPY

EUR

5.0010.00

-0.54-5.45

-4.41

-4.04

-0.19

-1.29

-3.81

-13.08

-11.16

-8.47

-7.87

-0.04

-0.73

-1.74

-1.97

-2.44

-3.77

-4.36

-6.34

-8.31

-9.02

-11.12

-12.10

-13.26

15.00

2014 vs 2013

point-to-point average

(5.00) 5.00-

0.27

IDR apresiasi

0.69

2.114.90

6.967.81

9.90

10.13

11.2411.72

10.00 15.00

JPYIDR

EURIDR

MXNIDR

ZARIDR

TRYIDR

MYRIDR

KRWIDR

CNYIDR

INRIDR

PHPIDR

THBIDR

USDIDR (1.74)

(1.01)

(1.44)

31 Des 2014 vs 31 Des 201350

45

40

35

30

25

20

15

10

5

-

Q4 14 Q1 15 Q1 16 LaterQ2 15 Q3 15 Q4 15

Taper endannounce.

Taper ends

Jul-14

Agus-14

Sep-14

Okt-14

Nov-14

Des-14


Jan-13

Index, 1 Jan’10=100 Index, 1 Jan’10=100

Apr-13 Jul-13 Oct-13 Jan-14 Apr-14 Jul-14 Oct-14

160

150

140

130

120

110

100

90

80

160

150

140

130

120

110

100

90

80

Index50

45

40

35

30

25

20

15

10

Jan-

13Fe

b-13

Mar

-13

Apr-

13M

ay-1

3Ju

n-13

Jul-1

3Au

g-13

Sep-

13O

ct-1

3N

ov-1

3De

c-13

Jan-

13Fe

b-14

Mar

-14

Apr-

14M

ay-1

4Ju

n-14

Jul-1

4Au

g-14

Sep-

14O

ct-1

4N

ov-1

4De

c-14

15

10

5

0

-5

-10

-15

-20

2011

* Preliminary ** Projected

2012 20142013*

Billion USD

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1

Q2

Q3

Q4

Q1*

Q2*

Q3*

Q4*

*

Other InvestmentCapital and Financial Account PreliminaryDirect Investment

4,000

2,000

0

-2,000

-4,000

-6,000

-8,000

-10,000

-12,000

12,500

12,000

11,500

11,000

10,500

10,000

9,500

9,000

8,500

8,000

Million USD Rp/$

2010

Q1

201

0 Q

2

2010

Q3

2010

Q4

2011

Q1

201

1 Q

2

2011

Q3

2011

Q4

2012

Q1

201

2 Q

2

2012

Q3

2012

Q4

2013

Q1

201

3 Q

2

2013

Q3

2013

Q4

2014

Q1

201

4 Q

2

2014

Q3

2014

Q4

Current Account (LHS) Exchange Rate (RHS)


-25-20-15-10-5051015202530

4

5

6

7

8

9

10

Feb-

13

Apr

-13

Jun-

13

Aug

-13

Oct

-13

Dec

-13

Feb-

14

Apr

-14

Jun-

14

Aug

-14

Oct

-14

Dec

-14

(RHS) 10-Year SBN Yield

Yield Net Purchases/ (Rp T)

1.2 DOMESTIC FINANCIAL MARKET RISKS

5,226.9

(25.00)

(20.00)

(15.00)

(10.00)

(5.00)

-

5.00

10.00

15.00

20.00

4000

4200

4400

4600

4800

5000

5200

5400

Feb

13

Apr

13

Jun

13

Aug

st 1

3

Oct

13

Dec

13

Feb

14

Apr

14

Jun

14

Aug

st 1

4

Oct

14

Dec

14

(T) IDX Composite

IHSG Trillion


14

12

10

8

6

4

2

0

% yoy

Mar

-08

Jun-

08

Sep-

08De

c-08

Mar

-09

Jun-

09Se

p-09

Dec-

09M

ar-1

0

Jun-

10Se

p-10

Dec-

10M

ar-1

1Ju

n-11

Sep-

11De

c-11

Mar

-12

Jun-

12Se

p-12

Dec-

12M

ar-1

3

Jun-

13Se

p-13

Dec-

13M

ar-1

4

Jun-

14Se

p-14

Dec-

14

GDP Growth Interest Rate Speard (%)

20.00

15.00

10.00

5.00

0.00

-5.00

-10.00

-15.00

Billion US$

Mar

-08

Jun-

08Se

p-08

Dec-

08M

ar-0

9Ju

n-09

Sep-

09De

c-09

Mar

-10

Jun-

10Se

p-10

Dec-

10M

ar-1

1Ju

n-11

Sep-

11De

c-11

Mar

-12

Jun-

12Se

p-12

Dec-

12M

ar-1

3Ju

n-13

Sep-

13De

c-13

Mar

-14

Jun-

14Se

p-14

Dec-

14

Current Account Overall Balance

115110105100

95908580757065605550

US$ / Barel24-Jun-14

Concerns over

in IraqUS commences

Saudi Arabia

Asian buyers

Main oil drill in Libya resumes

111.59

6-Jan-1553.26

Jan-

14

Mar

-14

Apr-

14

May

-14

Jun-

14

Jul-1

4

Sep-

14

Nov

-14

Dec-

14

Jan-

15

- 52%

Date : 6-Jan-15


300

250

200

150

100

50

0

2008 2009 2010 2011 2012 2013 2014

Million US$

Private - Non Bank Private - Bank Goverment andCentral Bank

11


1.3 FINANCIAL SYSTEM STABILITY IN INDONESIA

1

1.4 SOURCES OF FINANCIAL IMBALANCES

Procyclicality2

:Normal : Alert : : Crisis

3,0

2,5

1,5

0,5

2,0

1,0

20

02

M0

1

20

02

M0

5

20

02

M0

9

20

03

M0

1

20

03

M0

5

20

03

M0

9

20

04

M0

1

20

04

M0

5

20

04

M0

9

20

05

M0

1

20

05

M0

5

20

05

M0

9

20

06

M0

1

20

06

M0

5

20

06

M0

9

20

07

M0

1

20

07

M0

5

20

07

M0

9

20

08

M0

1

20

08

M0

5

20

08

M0

9

20

09

M0

1

20

09

M0

5

20

09

M0

9

20

10

M0

1

20

10

M0

5

20

10

M0

9

20

11

M0

1

20

11

M0

5

20

11

M0

9

20

12

M0

1

20

12

M0

5

20

12

M0

9

20

13

M0

1

20

13

M0

5

20

13

M0

9

20

14

M0

9

20

14

M0

1

20

14

M0

5

78,68%

1,26%10,89%

2,63%

5,89% 0,15% 0,50%Banks

Rural Banks

Insurers

Pension Funds

Finance Companies

Guarantors

Pawnbrokers

12


3

Financial Cycle(FBF/RHS)

Business Cycle(FBF/LHS)

FC Peak(TP)

FC Trough (TP)

Crisis

0.10 0.02

0.02

0.01

0.01

(0.01)

(0.01)

(0.02)

(0.02)

2007Q2

0.08

0.06

0.04

0.02

-

(0.02)

19

93

Q1

19

93

Q4

19

94

Q3

19

95

Q2

19

96

Q1

19

96

Q4

19

97

Q3

19

98

Q2

19

99

Q1

19

99

Q4

20

00

Q3

20

01

Q2

20

02

Q1

20

02

Q4

20

03

Q3

20

04

Q2

20

05

Q1

20

05

Q4

20

06

Q3

20

07

Q2

20

08

Q1

20

11

Q4

20

12

Q3

20

13

Q2

20

14

Q1

20

14

Q4

20

15

Q3

(0.04)

(0.06)

(0.08)

(0.10)

1995Q1

2000Q2

2009Q4

2013Q3

2005Q2

20

16

Q2

1998Q2

1999Q2 2009Q3

20

08

Q4

20

09

Q3

20

10

Q2

20

11

Q1

40.0 8.0

7.0

5.0

4.0

3.0

2.0

1.0

6.0

35.0

30.0

25.0

20.0

15.0

10.0

5.0

0.0

Sep

-01

Mar

-02

Sep

-02

Mar

-03

Sep

-03

Mar

-04

Sep

-04

Mar

-05

Sep

-05

Mar

-06

Sep

-06

Mar

-07

Sep

-07

Mar

-08

Sep

-08

Mar

-09

Sep

-09

Mar

-10

Sep

-10

Mar

-11

Sep

-11

Mar

-12

Sep

-12

Mar

-13

Sep

-13

Mar

-14

Sep

-14

Credit Growth (%. yoy) GDP Growth (%. RHS)

40.0 3.0

2.5

1.5

1.0

0.5

0.0

-0.5

-1.0

-1.5

-2.0

2.035.0

30.0

25.0

20.0

15.0

10.0

Sep

-01

Mar

-02

Sep

-02

Crisis 2005 Crisis 2008

Mar

-03

Sep

-03

Mar

-04

Sep

-04

Mar

-05

Sep

-05

Mar

-06

Sep

-06

Mar

-07

Sep

-07

Mar

-08

Sep

-08

Mar

-09

Sep

-09

Mar

-10

Sep

-10

Mar

-11

Sep

-11

Mar

-12

Sep

-12

Mar

-13

Sep

-13

Mar

-14

Sep

-14

Credit-to-GDP Gap (%. RHS) Credit to GDP (%)r Trend

40%

Overheated

Overheated

Overheated

Overheated

35

30

25

20

15

Sep-0

1

Mar-02

Sep-02

Mar-03

Sep-03

Mar-04

Sep-04

Mar-05

Sep-05

Mar-06

Sep-06

Mar-07

Sep-07

Mar-08

Sep-08

Mar-09

Sep-09

Mar-

10

Sep-10

Mar-

11

Sep-1

1

Mar-

12

Sep-12

Mar-

13

Sep-13

Mar-

14

Sep-14

Credit to GDP (%) Trend

13


% Million US$

Mar

-09

Jun

-09

Sep

-09

De

c-0

9

Jun

-10

Sep

-10

De

c-1

0

Mar

-10

Mar

-11

Jun

-11

Sep

-11

De

c-1

1

Jun

-12

Sep

-12

De

c-1

2

Mar

-12

Mar

-13

Jun

-13

Sep

-13

De

c-1

3

Jun

-14

Sep

-14

De

c-1

4

Mar

-14

180

160

140

120

100

80

60

40

7

6.5

6

5.5

5

4.5

4

3.5

GDP (yoy. RHS) Public External Debt (LHS) Private External Debt (LHS)

Billion USD

Government + Central Bankand Private

PrivateGovernment + Central Bank

Billion USD

Dec

-05

Dec

-07

Dec

-09

Dec

-13

Oct

-14

Dec

-14

Dec

-11

Dec

-06

Dec

-08

Dec

-10

Mar

-14

Nov

-14

Dec

-03

Dec

-12

Dec

-14

Dec

-04

Dec

-03

Dec

-05

Dec

-07

Dec

-11

Dec

-13

Oct

-14

Dec

-09

180

160

140

120

100

80

60

40

20

0

35

30

25

20

15

10

5

0

Government + Central Bank GovernmentCentral Bank (RHS) Bank (RHS)

Private

Billion USD

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

%

250

200

150

100

50

-

20

18

16

14

12

10

8

6

4

2

0

State-OwnedNon-State-Owned


5 The

ROA ROE DER (rhs) (rhs)

Non-Affiliates

Non-Affiliates

Non-Affiliates

Affiliates

Affiliates

Affiliates

Affiliates

Mar

-08

Sep

-08

Mar

-09

Sep

-09

Mar

-10

Sep

-10

Mar

-11

Sep

-11

Mar

-12

Sep

-12

Mar

-13

Sep

-13

Mar

-14

Sep

-14

Jun

-08

Sep

-08

Jun

-09

Sep

-09

Jun

-10

Sep

-10

Jun

-11

Sep

-11

Jun

-12

Sep

-12

Jun

-13

Sep

-13

Sep

-14

Mar

-08

Sep

-08

Mar

-09

Sep

-09

Mar

-10

Sep

-10

Mar

-11

Sep

-11

Mar

-12

Sep

-12

Mar

-13

Sep

-13

Mar

-14

Sep

-14

Jun

-08

Sep

-08

Jun

-09

Sep

-09

Jun

-10

Sep

-10

Jun

-11

Sep

-11

Jun

-12

Sep

-12

Jun

-13

Sep

-13

Sep

-14

kali%30

25

20

15

10

5

-5

-10

-15

3,5

3,0

2,5

2,0

1,5

1,0

0,5

0,0

Non-Affiliates

15


16

14

12

10

8

6

4

2

0

140

120

100

80

60

40

20

0

2008

Q1

2007

Q1

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

2009

Q1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

2014

Q1

USD USD

Natural Gas (LHS) Crude Oil (RHS)

53,27 USD/Barrel

56,10 USD/Short Ton

2,89 USD/MMBTU

Coal (RHS)

6.500

5.500

4.500

3.500

2.500

1.500

500

-500

2008

Q1

2007

Q1

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

Q2

Q3

Q4

2009

Q1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

2014

Q1

USD

1.880 USD/Metric Ton

656 USD/Metric Ton

Rubber (LHS) CPO (RHS)


1.4.5 Property Prices

190,00

180,00

170,00

160,00

150,00

140,00

130,00

120,00

110,00

100,00

15,00

13,00

11,00

9,00

7,00

5,00

3,00

1,00

-1,00

Nov

-03

Mar

-03

Jul-0

4

Nov

-05

Mar

-05

Jul-0

6

Nov

-07

Mar

-07

Jul-0

8

Nov

-09

Mar

-09

Jul-1

0

Nov

-11

Mar

-11

Jul-1

2

Nov

-13

Mar

-13

Jul-1

4

%

IHPR growth YoY


240,00

220,00

200,00

180,00

160,00

140,00

120,00

2007 2008 2009 2010 2011 2012 2013 2014

5 Large Cities Other Cities

Bandung Jabotabek-Banten

220,00

200,00

180,00

160,00

140,00

120,00

100,00

2007 2008 2009 2010 2011 2012 2013 2014

Palembang Bandar Lampung

240,00

220,00

200,00

180,00

160,00

140,00

120,00

100,00

2007 2008 2009 2010 2011 2012 2013 2014

IHPR TotalPer capita GDP

yoy (%)

25,00

20,00

15,00

10,00

5,00

0,00

Mar-03

De

c-03

Sep-04

Jun-05

Mar-06

De

c-06

Sep-07

Jun-08

Mar-09

De

c-09

Sep-10

Jun-1

1

Mar-

12

De

c-12

Sep-13

Jun-14

De

c-14


200

180

SUMATERA

Medan

Padang

Palembang

Lampung

160

140

120

100

80

60

40

20

2007 2008 2009 2010 2011 2012 2013 2014

0

250

200

150

100

50

02007 2008 2009 2010 2011 2012 2013 2014

JAVA-BALI

Bandung

Semarang

Surabaya

Jabotabek

Yogyakarta

Denpasar

250

200

150

100

50

02007 2008 2009 2010 2011 2012 2013 2014

KALIMANTAN

Banjarmasin

180

160

140

120

100

80

60

40

20

02007 2008 2009 2010 2011 2012 2013 2014

Manado Makassar

SULAWESI


Mar

-07

Des

-07

Sep-

08

Jun-

09

Mar

-10

Des

-10

Sep-

11

Mar

-13

Des

-13

Des

-14

Sep-

14

Jun-

12

Total1.20

1.10

1.00

0.90

0.80

0.70

0.60

Jabodetabek

Jabodetabek

1.20

1.10

1.00

0.90

0.80

0.70

0.60

Bandung

Surabaya

Java-Bali

Semarang

Denpasar

Yogyakarta

Mar

-07

Des

-07

Sep-

08

Jun-

09

Mar

-10

Des

-10

Sep-

11

Mar

-13

Des

-13

Des

-14

Sep-

14

Jun-

12

Bandar Lampung Palembang

1.10

1.05

1.00

0.95

0.85

0.90

0.80

0.70

0.75

0.60

0.65

Padang Medan

Mar

-07

Des

-07

Sep-

08

Jun-

09

Mar

-10

Des

-10

Sep-

11

Mar

-13

Des

-13

Des

-14

Sep-

14

Jun-

12

Sumatera

Makasar Manado

1.40

1.30

1.20

1.10

1.00

0.90

0.80

0.70

0.60

Mar

-07

Des

-07

Sep-

08

Jun-

09

Mar

-10

Des

-10

Sep-

11

Mar

-13

Des

-13

Des

-14

Sep-

14

Jun-

12

Sulawesi

1.10

1.05

1.00

0.95

0.90

0.85

0.80

0.75

0.70

0.65

0.60


GDP Growth (lhs) Credit Growth (rhs)

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

-

40.00

35.00

30.00

25.00

20.00

15.00

10.00

5.00

-

Mar

-02

Sep

-01

Mar

-03

Sep

-02

Mar

-04

Sep

-03

Mar

-05

Sep

-04

Mar

-06

Sep

-05

Mar

-07

Sep

-06

Mar

-08

Sep

-07

Mar

-09

Sep

-08

Mar

-10

Sep

-09

Mar

-11

Sep

-10

Mar

-12

Sep

-11

Mar

-13

Sep

-12

Mar

-14

Sep

-13

Sep

-14

% yoy % yoy

GDP Growth (lhs) Non-Performing Loans (NPL) (rhs)

16.00

14.00

13.00

10.00

8.00

6.00

2.00

3.00

-

8.00

7.00

6.00

5.00

4.00

3.00

2.00

1.00

-

Mar

-02

Sep

-01

Mar

-03

Sep

-02

Mar

-04

Sep

-03

Mar

-05

Sep

-04

Mar

-06

Sep

-05

Mar

-07

Sep

-06

Mar

-08

Sep

-07

Mar

-09

Sep

-08

Mar

-10

Sep

-09

Mar

-11

Sep

-10

Mar

-12

Sep

-11

Mar

-13

Sep

-12

Mar

-14

Sep

-13

Sep

-14

% yoy %

21


%12

10

8

6

4

2

0

-2

Agric

ultu

re

Min

ing

Indu

stry

Elec

trici

ty

Trad

e

Corp

orat

e Se

rvice

Serv

ice

2013* 2014**

Determinants of Credit (short term)

-0.156*

GDP Growth 2.069***

0.461***

-0.022***

NPL -0.006***

j te - re = 0.620 -

j te - re = 0.998 -

Determinants of Credit ( )

c -30.717***

-0.014***

GDP 3.407***

22


Determinants of NPL (short term)

-0.200** GDP Growth -0.158***

10 -0.008* 1.586***

ju te - re = 0.831 -

Determinants of NPL

GDP -0.004*** 0.745***

ju te - re = 0.940 -

23


Box 1.2 ASEAN Banking Integration Framework (ABIF): Advantages and Risks

BACKGROUND AND OBJECTIVES OF THE ABIF

The ASEAN Banking Integration Framework (ABIF)

is an ASEAN initiative to expedite financial integration in

ASEAN, particularly in the banking subsector, under the

umbrella of the ASEAN Economic Community (AEC). By

signing the Cebu Declaration in 2007, leaders of ASEAN

nations agreed to hasten AEC implementation from

2020 to 2015 (effective from 31st December 2015). To

support the acceleration of the AEC implementation,

ASEAN financial integration initiatives were included in

the Roadmap for Monetary and Financial Integration

of ASEAN (RIA-fin), which among others are facilitated

through the liberalisation of financial services. To

promote liberalisation, the ASEAN Financial Integration

Framework (AFIF) was subsequently agreed by ASEAN

Central Bank Governors in 2011. ABIF was formulated

considering the large role played by the banking

industry in the ASEAN financial sector and in an effort

to accelerate integrated banking. The goal of the

integrated banking is to expand the role of banks from

ASEAN countries to facilitate trade and investment

amongst ASEAN members.

ABIF implementation will bring various advantages

and a number of risks concerning market access and

financial system stability. In terms of market access,

ABIF implementation will benefit Indonesia by creating

opportunities for banks to expand into ASEAN markets,

while business players will have greater access to more

sources of financing. Conversely, ABIF could trigger

a growing presence of foreign banks in Indonesia.

Consequently, when developing the ABIF framework,

Bank Indonesia played an active role in protecting the

national interest by proposing a framework based on

reciprocity and in the spirit of reducing gaps. In terms

of financial system stability, if not well managed, ABIF

implementation could exacerbate systemic risks and

contagion posed by ASEAN banks. Therefore, progress

is being monitored closely.

WHAT IS ABIF?

ABIF is one mechanism for banking integration in

ASEAN that will be conducted through an innovative

and pragmatic approach based on reciprocity to reduce

gaps in terms of market access and operational flexibility,

while remain adhere to prudential principles in each

respective country. Furthermore, its implementation

is in accordance with the level of preparation in each

corresponding country.

Reciprocity in the ABIF framework refers to

mutual market access and operational flexibility

between two or more countries as agreed by the

countries involved. To support implementation

of a mutually beneficial and mutually acceptable

agreement, based on Bank Indonesia’s proposal, ABIF

reciprocity is defined as follows:

a. For ASEAN Members States which do not have a

home-host relationship, reciprocal arrangement

shall be aimed at creating opportunities for

establishing Qualified ASEAN Banks (QAB);

b. For ASEAN members which already have a home-

host relationship, reciprocal arrangement shall

be aimed at reducing gaps in providing market

access and operational flexibility in each other’s

jurisdiction.

The two forms of reciprocity mentioned above

provide a number of advantages for Indonesia. If

24


Indonesia reaches agreement with an ASEAN Member

State but has no existing home-host relationship, banks

in Indonesia will receive the same level of market

access and operational flexibility as domestic banks

in that country. Meanwhile, Indonesia can request

ASEAN countries that have an existing home-host

relationship to reduce gaps in terms of market access

and operational flexibility. Market access gaps include

gaps in the number of banking presence, branches and

ATMs. While operational flexibility gaps among others

cover gaps in the foreign banks’ licensing process when

compared to local banks.

BANKING INTEGRATION THROUGH ABIF

Banking integration through ABIF only affects

Qualified ASEAN Banks (QAB). Non-QABs will also

be permitted to expand into other ASEAN countries

through banking liberalisation under the ASEAN

Framework Agreement of Services (AFAS) and Financial

Services Liberalisation (FSL).

Qualified ASEAN Banks (QAB) must meet general

QAB requirements and be approved by authorities

in both the home and host country. The general

requirements include sound financial and strong capital

base, sound management and prudential principles in

accordance with prevailing international standards.

Banking integration through ABIF consists of

two phases as follows: (i) the multilateral phase;

and (ii) the bilateral phase. All 10 ASEAN members

are required to participate in the multilateral phase,

grouped as a Task Force on ABIF (ABIF TF) to jointly

prepare ABIF Guidelines, namely a document outlining

operational framework guidelines for ASEAN countries

to implement the principles and processes of banking

integration under the ABIF framework, including the

general requirements for prospective QABs. Execution

of the multilateral process was performed under the

joint leadership of Indonesia and Malaysia after Bank

Indonesia and Bank Negara Malaysia were appointed as

co-chairs of the ABIF TF by other ASEAN members. The

multilateral phase had reached its conclusion, marked

by the approval of the ABIF Guidelines by all 10 central

bank governors from ASEAN on 31st December 2014.

The ABIF framework will now be included as a provision

in the Protocol to Implement the Sixth Package of

Commitments on Financial Services under the ASEAN

Framework Agreement on Services, a framework with

a mandate on liberalisation of financial services.

After the completion of the multilateral phase

to formulate the ABIF Guidelines, the subsequent

phase consists of bilateral cooperation between ASEAN

members. During this phase, each ASEAN member that

is prepared to integrate through ABIF will undertake

bilateral negotiations concerning which banks are

QABs as well as the forms of market access and

operational flexibility that will be provided to QABs in

each respective country. The results of the negotiations

will be outlined in the Schedule of Commitments (SoC)

under the AFAS/FSL.

ADVANTAGES OF ABIF FOR INDONESIA

ABIF will allow banks and business players in

Indonesia to contribute more to the ASEAN market.

The role of the Indonesian banking industry in ASEAN

is currently very limited. As of December 2014, there

were six banks operating in Indonesia with majority

ownership from ASEAN countries, namely three

banks from Malaysia and three banks from Singapore.

In addition there is a bank representative office

from Thailand. Those foreign banks have hundreds

of branches and thousands of ATMs operating in

Indonesia. In contrast, there is only one Indonesian

25


bank operating in Malaysia, namely an international

offshore bank (not a QAB), and two remittance offices

(owned by Bank Mandiri and BRI), as well as there is

only two Indonesian banks in Singapore, one bank

have a license as an offshore bank and the other as a

full-fledged bank.

The presence of ABIF, which prioritises reciprocity,

and its agreed mechanism to reduce gaps in terms

of market access and operational flexibility, will

create broader opportunities for the Indonesian

banking industry to obtain greater market access and

operational flexibility in the ASEAN region. QABs from

Indonesia will receive the same treatment as local

banks. Consequently, business players will also benefit

from greater access to secure sources of financing for

cross-border trade and investment activity.

One benefit of ABIF that has already been seen

for Indonesia was the successful bilateral negotiations

with Malaysia taken to ensure that the ABIF principles

multilaterally prepared in the ABIF Guidelines can be

effectively implemented, to the advantage of ASEAN

countries. The outcome of bilateral negotiations

with Malaysia was outlined within the Heads of

Agreement (HOA) document, which covers the

presence of Indonesian and Malaysian banks in

each other jurisdiction. The HOA also identifies the

market access and operational flexibility that will be

accorded to the banking institutions once conferred

and established as a QAB in the respective jurisdiction.

The points agreed in the HOA will later be outlined in a

Bilateral Agreement between the banking authorities

in Indonesia and Malaysia. Thereafter, the points of

agreement in the Bilateral Agreement will be included

in the Schedule of Commitments (SoC) under the

AFAS/FSL. The successful negotiations held between

Indonesia and Malaysia are expected to facilitate future

bilateral negotiations between Indonesia and other

ASEAN members.

POTENTIAL RISKS OF ABIF IMPLEMENTATION

Regarding market access, it is undeniable that

ABIF implementation could potentially expand foreign

bank presence in Indonesia, particularly banks from

ASEAN. Indonesia, however, successfully included a

number of principles/articles in the ABIF Guidelines to

mitigate that potential risk, namely: (i) ABIF emphasises

reciprocity, namely that the agreement reached must

be mutually beneficial and mutually acceptable to both

parties; (ii) a spirit of reducing the gap is prioritised

in the application of reciprocity in countries with an

existing home-host relationship; (iii) when determining

the number of QABs, the banking presence of one

country in another is taken into consideration; and

(iv) existing banks from ASEAN countries operating in

other ASEAN countries will receive priority as candidate

QABs.

Through the inclusion of the aforementioned

principles/articles, a large-scale influx of foreign

banks to Indonesia, especially from ASEAN countries,

is not expected to materialise. Nonetheless, banks

in Indonesia must also anticipate the impact of ABIF

by strengthening their capital, the quality of human

resources, the quality and variety of products, as well

as efficiency to boost competitiveness.

Concerning financial system stability, ABIF

implementation could escalate the threat of systemic

risk in the ASEAN region because integrated banking

spreads financial crises through contagion due to

the cross-border transmission of financial instability.

The ABIF framework already contains risk mitigation

through the application of comprehensive ABIF

principles. Consequently, ABIF implementation

26


covers four crucial areas, namely: i) prudential

principles; ii) financial stability infrastructure that

includes cooperation between bank supervisors; iii)

enhancing competence; and iv) the financial safety

net. The active role of each ASEAN member, specifically

the central banks and banking authorities, is still

required to ensure comprehensive monitoring of ABIF

implementation now and moving ahead.

27

Chapter 2 . Financial Markets

Financial Markets2

28


29


2.1 FINANCIAL MARKET RISKS

Shares Tradeable Government Securitas

150

100

50

0

-50

-100

2009 2010 2011 2012 2013 2014

Sem 1 Sem 2

Trillion of Rp

Chapter 2 Financial Markets


2.1.1 Money Market20

10/J

ul

2010

/Oct

2011

/Jan

2011

/Apr

2011

/Jul

2011

/Oct

2012

/Jan

2012

/Apr

2012

/Jul

2012

/Oct

2013

/Jan

2013

/Apr

2013

/Jul

2013

/Oct

2014

/Jan

2014

/Apr

7.0 35

30

25

20

15

10

5

--

6.0

5.0

4.0

3.0

2.0

1.0

2014

/Jul

2014

/Oct

Percent Trillion of Rp

Average Daily Non - Overnight Volume

Weighted Average Overnight Rate

Average Daily Overnight Volume

Weighted Average of All Rates

Mei - 11

Oct - 11

Mar - 12

Aug - 12

Jan - 13

Jun - 13

Apr - 14

Sep - 14

Jun - 08

Nov - 08

Apr - 09

Sep - 09

Feb - 10

Jul - 10

Dec - 10

517%

12

7

2

3

1

-1

Max-min Speard (RHS)Highest Lending Rate (%)

Lowest lending rate (%)

Weighted average loans

Jan

-13

Feb

-13

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Jun

-13

Jul-

13

Au

g-1

3

Se

p-1

3

Oct

-13

No

v-1

3

De

c-1

3

Jul-

14

Au

g-1

4

Se

p-1

4

Oct

-14

No

v-1

4

De

c-1

4

Jan

-14

Feb

-14

Ma

r-1

4

Ap

r-1

4

Ma

y-1

4

Jun

-14

100

90

80

70

60

50

40

30

20

10

0

Percent6.5

6.0

5.5

5.0

4.5

4.0

3.5

Buku 4 Buku 3 Buku 2 Buku 1

300

200

100

0

-100

-200

-300

2013 2014

QT 1 QT 2 QT 3 QT 4 QT 1 QT 2 QT 3 QT 4

Trillion of Rp


2010

/Jul

2010

/Oct

2011

/Jan

2011

/Apr

2011

/Jul

2011

/Oct

2012

/Jan

2012

/Apr

2012

/Jul

2012

/Oct

2013

/Jan

2013

/Apr

2013

/Jul

2013

/Oct

2014

/Jan

2014

/Apr

0.35 1,600

1,400

1,200

1,000

800

600

400

200

--

0.30

0.25

0.20

0.15

0.10

0.05

2014

/Jul

2014

/Oct

Percent Million of USD

Average daily non-overnight volume

Weighted average overnight rate

Average daily overnight volume

Weighted Average of All Rates

May - 09

Aug- 09Nov - 09Feb - 10M

ay - 10Aug- 10Nov - 10Feb - 11M

ay - 11Aug- 11Nov - 11Feb - 12M

ay- 12Aug- 12Nov - 12Feb - 13M

ay - 13

Feb - 14M

ay - 14Aug - 14Nov - 14

Aug- 13Nov - 13

Max Min Speard (RHS) Highest Lending Rate (%) Weighted average lending rate (%)

0.50%

0.6

0.5

0.4

0.3

0.2

0.1

0

0.45

0.40

0.35

0.30

0.25

0.20

0.15

0.10

0.05

0.00

Weighted average loans

Jan

-13

Feb

-13

Ma

r-1

3

Ap

r-1

3

Ma

y-1

3

Jun

-13

Jul-

13

Au

g-1

3

Se

p-1

3

Oct

-13

No

v-1

3

De

c-1

3

Jul-

14

Au

g-1

4

Se

p-1

4

Oct

-14

No

v-1

4

De

c-1

4

Jan

-14

Feb

-14

Ma

r-1

4

Ap

r-1

4

Ma

y-1

4

Jun

-14

50

45

40

35

30

25

20

15

10

5

0

Percent Percent0.3

0.2

0.2

0.1

0.1

0.0

2012 Sem I 2012 Sem II 2013 Sem I 2013 Sem II 2014 Sem I

0

1

-1

2

-2

3

-3

4

-4

Jan

2013

Feb

2013

Mar

201

3Ap

r 201

3M

ay 2

013

Jun

2013

Jul 2

013

Aug

2013

Sep

2013

Oct

201

3N

ov 2

013

Dec

2013

Jan

2014

Feb

2014

Mar

201

4Ap

r 201

4M

ay 2

014

Jun

2014

Jul 2

014

Aug

2014

Sep

2014

Oct

201

4N

ov 2

014

Dec

2014

Trillion of USD


2.1.2 Foreign Exchange Market

35Trillion of Rp Percent

9.0

8.0

7.0

6.0

5.0

4.0

3.0

2.0

1.0

-

30

25

20

15

10

5

01 3 5 7 9 11 1 3 5 8 1012 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11

2010 2011 2012 2013 2014

Repo Volume Repo Rate (RHS)

35Trillion of Rp Percent

9.0

8.5

8.0

7.5

7.0

6.5

6.0

5.5

5.0

4.5

4.0

30

25

20

15

10

5

01 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 10 1 4 7 10

20102009 2011 2012 2013 2014

Total Volume LF Rate (RHS)

800Point Rp

14,000

13,000

12,000

11,000

10,000

9,000

8,000

600

400

200

-200

-400

-600

Jul-1

2

Sep-

12

Nop

-12

Jul-1

4

Sep-

14

Nop

-14

Jan-

13

Mar

-13

May

-13

Jan-

14

Mar

-14

May

-14

Jul-1

3

Sep-

13

Nop

-13

0

Spread NDF-FWD 1B Average Daily 20D Spread NDF 1B (RHS)


2.1.3 Bond Market

8.0%

7.0120

100

80

60

40

20

Jun-12 Dec-12 Dec-13Jun-13 Jun-14

6.0

5.0

4.0

3.0

2.0

1.0

0.0

Total Volume by Semester (RHS) O/N Broker Swap Premium

Billion of USD

1B Broker Swap Premium 3B Broker Swap Premium6B Broker Swap Premium

70

60

50

40

30

20

10

OPTION

0

2010

/Jul

2010

/Sep

2010

/Nov

2011

/Jan

2011

/Mar

2011

/May

2011

/Jul

2011

/Sep

2011

/Nov

2012

/Jan

2012

/Mar

2012

/May

2012

/Jul

2012

/Sep

2012

/Nov

2013

/Jan

2013

/Mar

2013

/May

2013

/Jul

2013

/Sep

2013

/Nov

2014

/Jul

2014

/Sep

2014

/Nov

2014

/Jan

2014

/Mar

2014

/May

USD miliar

FORWARD SWAP SPOT

70

65

60

55

50

45

40

35

301 2 3 4 5 6 7 8 9 10 11 12

Billion of USD

2011 2012 2013 2014

Net Jual USD

Net beli USD

(600,000)

(400,000)

(200,000)

-

600,000

400,000

200,000

2-J

an-1

41

3-J

an-1

42

3-J

an-1

44

-Feb

-14

13

-Feb

-14

24

-Feb

-14

5-M

ar-1

41

4-M

ar-1

42

5-M

ar-1

44

-Ap

r-1

41

6-A

pr-

14

28

-Ap

r-1

48

-May

-14

20

-May

-14

2-J

un

-14

11

-Ju

n-1

42

0-J

un

-14

1-J

ul-

14

11

-Ju

l-1

42

2-J

ul-

14

6-A

ug-

14

15

-Au

g-1

42

6-A

ug-

14

4-S

ep-1

41

5-S

ep-1

42

4-S

ep-1

43

-Oct

-14

14

-Oct

-14

23

-Oct

-14

3-N

ov-

14

12

-No

v-1

42

1-N

ov-

14

2-D

ec-1

41

1-D

ec-1

42

2-D

ec-1

4Non-residents Individuals

90Billion of Rp Point

115

80

70

60

50

40

30

20

10

2009 2010 2011 2012 2013 2014

Sem 1 Sem 2

0

110

105

100

95

90

85

80


INDO INDI THAI MALY FILIP

Jun-13 7.06 7.69 3.63 3.72 4.01Jul-13 7.79 8.79 3.86 4.04 3.19

Aug-13 8.52 8.86 4.13 4.04 3.56Sep-13 8.32 8.97 3.87 3.76 3.38Oct-13 7.35 8.78 3.79 3.65 3.50

Nov-13 8.59 9.09 3.91 4.30 3.34Dec-13 8.37 9.17 3.80 4.20 3.40Jan-14 8.81 8.86 3.78 4.22 4.26Feb-14 8.34 9.06 3.54 4.10 4.39Mar-14 7.99 9.11 3.51 4.01 3.86Apr-14 7.86 9.02 3.42 3.95 3.99

May-14 7.95 8.77 3.57 3.96 3.60Jun-14 8.09 8.58 3.57 3.93 3.80Jul-14 7.94 8.58 3.44 3.81 3.74

Aug-14 8.09 8.75 3.31 3.83 3.86Sep-14 8.28 8.75 3.20 3.84 3.92Oct-14 7.97 8.41 2.98 3.79 3.81

Nov-14 7.69 8.22 2.66 3.74 3.55Dec-14 7.74 8.02 2.49 4.04 3.63

1200

1400

Billion of Rp

1000

800

600

400

200

0

Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Jun-14 Dec-14Dec-13

Other

Central Bank

9.50

9.00

8.50

8.00

7.50

7.00

6.50

6.00

2T 3T 4T 5T 6T 7T 8T 9T 10T 11T 12T 13T 15T 15T 18T 20T 30T

Jun-14 Dec-14

%

INDO INDI THAI MALY FILIP

Jun-13 19.06 9.28 44.58 27.18 42.62 Jul-13 36.63 38.82 16.26 32.92 58.60

Aug-13 19.85 25.99 19.78 16.13 55.97 Sep-13 32.18 8.14 22.74 21.63 46.79 Oct-13 28.82 8.67 10.76 12.88 38.27

Nov-13 17.09 11.56 16.30 23.67 25.60 Dec-13 8.44 11.65 11.23 14.20 46.81 Jan-14 26.04 12.36 12.62 19.43 51.35 Feb-14 10.53 8.09 10.26 9.54 16.75 Mar-14 11.18 7.73 12.66 10.31 34.74 Apr-14 4.28 9.40 12.25 12.33 9.31

May-14 5.36 9.04 21.80 14.67 22.37 Jun-14 4.11 8.11 8.92 8.54 12.39 Jul-14 4.22 7.85 11.49 8.01 14.04

Aug-14 4.40 7.60 10.90 12.58 7.48 Sep-14 8.32 7.83 10.76 5.78 7.80 Oct-14 6.99 8.06 16.13 13.99 10.70

Nov-14 6.98 5.52 17.91 9.53 14.16 Dec-14 17.73 8.77 25.44 25.42 6.45


40

35

30

25

20

15

10

5

0

PointJu

n-13

Jul-1

3

Aug

-13

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jul-1

4A

ug-1

4

Sep-

14

Oct

-14

Nov

-14

Dec

-14

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Short Term Medium Term Long Term

200Point

rebased 1/1/2013

1-5 years 6-10 years 11-30 years

180

160

140

120

100

80


Jun-

13Ju

l-13

Aug

-13

Sep-

13

Oct

-13

Nov

-13

Dec

-13

Jul-1

4A

ug-1

4

Sep-

14

Oct

-14

Nov

-14

Dec

-14

Jan-

14

Feb-

14

Mar

-14

Apr

-14

May

-14

Jun-

14

Short Term : 3 yearsMedium Term : 5 yearsLong Term : 10 years

(%)

25

20

15

10

5

-

Jan-14

Feb-14

Mar-1

4

Apr-14

May-1

4

Jun-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jul-1

4


Point106

104

102

100

98

96

94

92

90

88

Jan-14

Feb-14

Mar-1

4

Apr-14

May-1

4

Jun-14

Aug-14

Sep-14

Oct-14

Nov-14

Dec-14

Jul-1

4


Short Term : 3 yearsMedium Term : 5 yearsLong Term : 10 years

7

6

5

4

3

2

1

0

Trillion of Rp Trillion of Rp 25

20

15

10

5

0

2010 2011 2012 2013 2014

Sem 1 Sem 2

Net Flow Outstanding Foreign Holdings (RHS)


(%)15

14

13

12

11

10

9

8

71

SBN Jun’14

SBN Des’14

2 3 4 5 6 7 8 9 10

AAA Jun’14

BBB Jun’14

AAA Des’14

BBB Des’14

Corporate Bond Frequency SUN Frequency Outstanding Corporate Bonds (RHS)

180 230

Trillion of Rp

2007 2008 2009 2010 2011 2012 2013 2014

TW 1 TW 2 TW 3 TW 4

Thousand Time

210

190

170

150

130

110

90

70

50

30

160

140

120

100

80

60

40

20

0

Indonesia Thailand Malaysia the Philippines

Rebased

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

May

-13

Jun

-13

Jul-

13

Au

g-1

3Se

pt-

13

Jan

-14

Feb

-14

Mar

-14

Ap

ril-

14

May

-14

Jun

-14

Oct

-13

No

v-1

3D

ec-1

3

Jul-

14

Au

g-1

4Se

pt-

14

Oct

-14

No

v-1

4D

ec-1

4

130

125

120

115

110

105

100

95

90

85

80

MSCI Euro MSCI Asia IndonesiaDow Jones

%

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

t-1

3

Jan

-14

Mar

-14

May

-14

No

v-1

3

Jul-

14

Sep

t-1

4

No

v-1

4

45

40

35

30

25

20

15

10

5

0

2.1.4 Stock Market


2012QT 4

IDX Composite

Financial

Agriculture

Basic Industry

Property

Mining

Infrastructure

Trade

Miscellaneous Industries

6.32

16.81

14.05

4.99

12.98

23.56

3.77

8.25

22.20

26.96

11.90

17.47

25.36

12.80

8.97

20.47

11.28

19.80

10.95

17.01

13.43

26.41

13.48

22.61

7.31

26.65

23.51

10.86

8.39

21.34

7.72

1.69

20.09

3.21

11.99

11.74

7.25

5.25

19.45

13.28

10.18

11.84

33.52

5.71

17.12

10.11

7.78

20.17

9.31

15.57

11.97

15.05

33.08

6.00

6.60

9.67

14.69

16.39

9.04

19.46

20.19

15.68

19.35

29.27

19.58

39.92

11.27

27.29

10.57

54.89

44.86

41.96

54.24

58.27

63.79

43.53

42.83

44.05

46.66

50.74

13.18

17.48

11.32

21.11

20.13

19.92

17.73

8.54

29.21

24.31

QT 4QT1 QT2 QT3 QT 4QT1 QT2 QT32013 2014

Trillion of Rp 5,500

5,000

4,500

4,000

3,500

3,000

2,500

2,000

60

50

40

30

20

10

0

-10

-20

-30

-40

2009 2010 2011 2012 2013 2014

Sem 1 Sem 2

Share JCI (RHS)

India the Philippines Indonesia Thailand

Mar

-13

Jul-

13

Mar

-14

No

v-1

3

Jul-

14

No

v-1

4

Mar

-11

Jul-

11

Mar

-12

No

v-1

1

Jul-

12

No

v-1

2

Jul-

09

Mar

-10

Rebased

No

v-0

9

Jul-

10

No

v-1

0

110

105

100

95

90

85

100%

90

80

70

60

50

40

30

20

10

0

Feb-

08

Jul-0

8

Dec

-08

May

-09

Oct

-09

Mar

-10

Aug

-10

Jan-

11

Jun-

11

Nov

-11

Apr-

12

Sep-

12

Feb-

13

Jul-1

3

Dec

-13

May

-14

Oct

-14

Non LQ45 LQ45

6,000Trillion of Rp

80%

75

70

65

60

55

50

45

40

5,000

4,000

3,000

2,000

1,000

2004

2005

2006

2007

2008

2009

2010

2011

2012

2013

2014

LQ45 LQ45 Share (RHS)


2.1.5 Mutual Funds

1400

1200

1000

800

600

400

200

Spread (RHS) JCI

2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

0

rebased 1/1/2000 500bps

400

300

200

100

0

-100

-200

LQ45

60

(%)

50

40

30

20

10

0

Jan-14

Feb-14

Mar-

14

Apr-

14

May-14

Jun-14

Jul-

13

Au

g-13

Sep-13

Oct-13

No

v-13

De

c-13

Jul-

14

Au

g-14

Sep-14

Oct-14

No

v-14

De

c-14

Fixed Income Funds

120

100

80

60

40

20

0

-20

NAB Total Mutual Funds JCI

%

1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11 1 3 5 7 9 11

2010 2011 2012 2013 2014

Total Mutual Funds (RHS) NAV (Trillion of Rp) (millions)

1 4 7 10

2008

250 900

800

700

600

500

400

300

200

100

0

200

150

100

50

01 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10 1 4 7 10

2009 2010 2011 2012

1 4 7

2013 2014


Trillion of Rp

100

110

90

80

70

60

50

40

1 2 3 4 5 6 7 8 9 10 11 12

2011 2012 2013 2014

Trillion of Rp 50

48

46

44

42

40

38

36

34

32

30

1 2 3 4 5 6 7 8 9 10 11 12

2011 2012 2013 2014

Trillion of Rp 24

22

20

18

16

14

12

10

8

6

1 2 3 4 5 6 7 8 9 10 11 12

2011 2012 2013 2014

Trillion of Rp 45

40

35

30

25

20

1 2 3 4 5 6 7 8 9 10 11 12

2011 2012 2013 2014

Trillion of Rp

300

250

200

150

100

50

0

Jan

Apr Ju

lO

ct Jan

Apr Ju

lO

ct Jan

Apr Ju

lO

ct Jan

Apr Ju

lO

ct Jan

Apr Ju

lO

ct Jan

Apr Ju

lO

ct

2009 2010 2011 2012 2013 2014

Equity Funds Money Market Funds FundsFixed-Income Funds Protected Funds Others


-15

-10

-5

0

5

10

15

-1.0 0.0 1.0 2.0 3.0 4.0

Des'14 Jun'14E

x

c

e

s

s

R

e

t

u

r

n

E

x

c

e

s

s

R

e

t

u

r

n

Excess

Return

BetaBeta

BetaBeta

(15)

(10)

(5)

-

5

10

15

-1 -0.5 0 0.5 1 1.5 2

Des'14

Jun'14

Excess

Return

-15

-10

-5

0

5

10

-1 -0.5 0 0.5 1 1.5 2 2.5

Des'14

Jun'14

0.0

0.5

1.0

1.5

2.0

2.5

3.0

-0.3 -0.2 -0.1 0 0.1 0.2 0.3

Des'14

Jun'14

Equity Funds

2.2 FINANCIAL MARKETS AS SOURCES OF NONBANK FINANCING

Trillion of Rp

Sem I Sem II Sem I Sem II Sem I Sem II

A. Bank Credit 252.81 254.96 251.26 333.75 175.29 206.15B. Non-bank Financing 92.05 62.27 95.25 65.77 64.79 47.48 B1. Capital Market 53.19 44.38 76.48 38.56 51.88 42.28 - IPO and Rights Issues 13.58 16.53 32.35 25.19 26.35 21.27 - Corporate Bonds and Sukuk 39.61 27.85 44.13 13.37 25.53 21.01 B2. Finance Companies 38.86 17.89 18.77 27.21 12.90 5.21

344.86 317.23 346.51 399.52 240.08 253.63TOTAL

2012 2013 2014


Corporate Bonds (Trillions of Rp)

Average yield of 5-year corporate bonds (%)

Working Capital Credit (%)

20

18

16

14

12

10

8

6

4

2

0

Trillions of Rp

Jan-13

Feb-13

Mar-

13

Apr-

13

May-13

Jun-13

Jan-14

Feb-14

Mar-

14

Apr-

14

May-14

Jun-14

Jul-

13

Au

g-13

Sep-13

Oct-13

No

v-13

De

c-13

Jul-

14

Au

g-14

Sep-14

Oct-14

No

v-14

De

c-14

60 8

7

6

5

4

3

2

1

0

50

40

30

20

10

02007 2008 2009 2010 2011 2012 2013 2014

Trillion of Rp Percent

IPO

Rights Issues GDP (RHS)

Working Capital Credit (YoY)New Issuers

60 8

7

6

5

4

3

2

1

0

50

40

30

20

10

02007 2008 2009 2010 2011 2012 2013 2014

Trillion of Rp Percent

IPO

Rights Issues GDP (RHS)

Working Capital Credit (YoY)New Issuers

2.3 THE IMPORTANCE OF FINANCIAL MARKETS FOR

THE BANKING INDUSTRY


Souce of Fund 2012 2013 2014Trillion of Rp


I. Domes kInterbank Money Market

- Loan Volume 1.066 1.233 1.374 1.241 1.326 271

- Average Daily Rupiah Loan Volume 5.0 6.1 6.0 6.0 6.7 7.1

- Average Daily USD Loan Volume (millions of USD) 544.2 311.4 224.2 246.0 262.4 291.6

Repo at Bank Indonesia (LF) 0.4 1.1 0.5 5.5 0.1 2.4

Repo by Banks 32.7 41.0 31.1 32.3 113.6 88.9

Bond Market 6.8 7.1 8.5 3.7 5.0 2.0

- Bonds 0.5 0.3 1.2 1.0 1.3

- 5.5 6.8 6.6 3.7 4.0 0.7

- Sukuk 0.8 0.7

Stock Market 1.9 4.7 4.2 9.4 1.5 2.1

- IPOs 1.7 0.6 0.1 0.1

- Rights Issues 1.9 4.7 2.4 8.8 1.5 2.0

II. Bonds (Millions of USD) 500 500

(Billions of USD) 3.1 1.5 0.3 0.8 3.0 2.2

Fund DisbursementsI. Domes c

Interbank Money Market

- Average Daily Rupiah Loan Volume 5.0 6.1 6.0 6.0 6.7 7.1

- Average Daily USD Loan Volume (millions of USD) 544.0 311.4 224.6 247.8 262.8 291.4

Deposit Facility 118.3 81.6 121.1 123.5 125.3 98.5

Term Deposits 88.7 180.9 51.7 - - - Average Daily USD Loan Volume (millions of USD) - - - 26.5 23.3 102.3

89.9 79.4 82.1 89.6 98.6 87.0

Reverse Repo SUN 60.3 81.4 73.5 74.6 74.4 88.6

286.0 282.0 298.0 316.0 338.0 374.0


I. Rupiah Interbank Loans 54 79 74 81 81 76

Foreign Currency Interbank Loans 51 51 50 48 47 39

Repo at Bank Indonesia (LF) 3 4 3 10 1 7

Repo by Bank 6 7 7 10 16 16

Bond Market 7 6 8 3 2 3

- Bond 2 2 3 1 2

- 4 4 4 3 1 1

- Sukuk Bonds 1 1

Stock Market 3 4 7 9 3 3

- IPO 4 2 1 1

- Rights Issues 3 4 3 7 2 2

II. Bond (USD) 1 1

I. D me cRupiah Interbank Lending 89 95 93 95 94 99

Foreign Currency Interbank Lending 48 47 48 49 45 42

Deposit Facility 107 105 110 100 107 134

Term Deposits 51 65 39 - - -

- - - 43 50 76

95 86 91 98 98 108

Reverse Repo SUN 38 30 31 25 36 59

86 86 88 88 91 87

2012 2013 2014


2.3.1 Banking Sector External Debt1


Government and Central Bank Private

Total External Loans (RHS)

350,000

300,000

250,000

200,000

150,000

100,000

50,000

-

180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

-

2011

SMT 1 SMT 2 SMT 1 SMT 2 SMT 1 SMT 2 SMT 2**SMT 1*

2012 2013* 2014

Million of USD Million of USD

Non BankBank

180,000

160,000

140,000

120,000

100,000

80,000

60,000

40,000

20,000

-

2011

SMT 1 SMT 2 SMT 1 SMT 2 SMT 1 SMT 2 SMT 1* SMT 2**

2012 2013* 2014

Million of USD

Private ForeignState-Owned Private Joint-Venture

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

-

2011


2012 2013* 2014

Bank External Debt Bank External Debt Growth

18.00

16.00

14.00

12.00

10.00

8.00

6.00

2.00

0.00

35,000

30,000

25,000

20,000

15,000

10,000

5,000

-

2011


2012 2013* 2014

Million of USD Percent

LongTermShort Term

100

80

60

40

20

0

2011

SMT 1 SMT 2 SMT 1 SMT 2 SMT 1 SMT 2 SMT 2*SMT 1*

2012 2013* 2014

Percent

75.51% 73.09% 75.41% 73.01% 67.43% 64.01% 65.50% 63.69%

24.49% 26.91% 24.59% 26.99% 32.57% 35.99% 34.50% 36.31%


2.4 F INANCIAL MARKET DEEPENING BY BANK

INDONESIA

2024

2023

2022

2021

2020

2019

2018

2017

2016

2015

2014

15.00

0.00

232.93

386.21

904.40

1.168.10

0.47

1.878.37

2.054.57

4.008.25

73.02

0 2.000 4.000 6.000

Year

Dec-14

0.68% 0.00%0.00%

2.17%3.60%

37.39%

19.16%

17.52%

10.90%

8.44%


2-A

ug-

14

2-Se

pt-

14

2-Ja

n-1

4

2-Fe

b-1

4

2-Ja

n-1

5

2-Fe

b-1

5

2-M

ar-1

4

2-A

pri

l-14

2-M

ay-1

4

2-Ju

n-1

4

2-Ju

l-14

2-O

ct-1

4

2-N

ov-

14

2-D

ec-1

4

6,000,000

5,000,000

4,000,000

3,000,000

2,000,000

1,000,000 Post

13,000

12,500

12,000

11,500

11,000

10,500

FX Turnover (000’s of USD) USD/IDR (rhs)

Percent

2-A

ug-

14

2-S

ep

t-1

4

2-J

an-1

4

2-F

eb

-14

2-J

an-1

5

2-F

eb

-15

2-M

ar-1

4

2-A

pri

l-1

4

2-M

ay-1

4

2-J

un

-14

2-J

ul-

14

2-O

ct-1

4

2-N

ov-

14

2-D

ec-

14

45

40

35

30

25

20

15

10

5

0

Post

ave : 32%ave : 32%


Prior to MRA

MRA Expansion

Sep

t-14

No

v-14

Jan

-14

Jan

-15

Mar

-14

May

-14

Jul-

14

Sep

t-13

No

v-13

Jan

-13

Mar

-13

May

-13

Jul-

13

Sep

t-12

No

v-12

Jan

-12

Mar

-12

May

-12

Jul-

12

30,000

25,000

20,000

15,000

10,000

5,000

-


Box 2.1

th

2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

17.5

15

12.5

10

7.5

5

2.5

0

Billion of Rp


Box 2.2Financial Market Development in the Indonesia Sharia Financial Architecture

53

Chapter 3 . The Household and Corporate Sectors3The Household and Corporate Sectors3

54

Chapter 3 . The Household and Corporate Sectors

55


Chapter 3 The Household and Corporate Sectors

3.1 HOUSEHOLD SECTOR ASSESSMENT

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005

2006

2007

1999

2002

2003

2004

2008

2009

2010

2011

2012

2013

Spending on Non-Food Items52,81%

Spending on Food Items 47,19%


95

100

105

110

115

120

125

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

Employed Unemployment Total Labour Force (rhs)

Million PeopleSegment

35

30

25

20

15

10

5

0

2012

Note : *) Preliminary **) Projected

2013 2014 2015

1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12* 1**

%

17.21 17.69

28.22

24.00

12.51

4.25

11.4

15.08

7.99

Annual growth (%. yoy)

11.4

80

70

60

50

40

30

20

10

0

0.80

0.70

0.60

0.50

0.40

0.30

0.20

0.10

0.0

1955

1950

1965

1960

1975

1970

1980

1990

1985

2000

1995

2010

2005

2015

2025

2020

2035

2030

2045

2040

2050

3.1.2 Sources of Vulnerability and Household Sector


140.0

130.0

120.0

110.0

100.0

90.0

80.0

2012

OPTI

MIS

TIC

PESS

IMIST

IC

2013 2014

200

190

180

170

160

8.0

6.0

4.0

2.0

0.0

2012 2013 2014 2015

1 2 3 4 5 6 7 8 9 10 11 12 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6

2011

( ) (%)


3.1.3 Household Financial Performance

Loan Repayments SavingsLoan Repayments Savings

Loan Repayments Savings

Income Rp1.39 - 2.78 juta Rp2.97 - 4.25 juta Rp4.53 - 5.84 juta Rp6.09 - 7.82 juta > Rp7.82 juta Average72.05% 70.59% 68.50% 67.36% 63.90% 69.69%

Loan repayments 10.91% 12.38% 14.57% 14.45% 17.11% 13.02%Savings 17.03% 17.03% 16.93% 18.19% 18.99% 17.29%Total 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%

0-10% 10%-20% 20%-30% >30% Inabilityto save

Rp 1.39 - 2.78 juta 29.32% 7.84% 6.86% 4.18% 3.70% 6.74%Rp 2.97 - 4.25 juta 31.78% 9.56% 8.90% 5.32% 2.91% 5.08%Rp 4.53 - 5.84 juta 20.92% 8.47% 5.37% 2.91% 2.06% 2.11%Rp 6.09 - 7.82 juta 9.14% 2.71% 2.69% 1.46% 1.00% 1.28%> Rp7.82 juta 8.85% 2.98% 2.55% 1.61% 0.93% 0.78%

Total 100.00% 31.55% 26.36% 15.48% 10.61% 15.99%

Income Total

Saving

0-10% 10%-20% 20%-30% >30%Rp 1.39 - 2.78 juta 29.32% 18.51% 5.86% 3.44% 1.52%Rp 2.97 - 4.25 juta 31.78% 18.68% 6.41% 4.59% 2.09%Rp 4.53 - 5.84 juta 20.92% 11.24% 4.35% 3.78% 1.54%Rp 6.09 - 7.82 juta 9.14% 4.64% 2.25% 1.52% 0.73%> Rp7.82 juta 8.85% 3.93% 1.87% 1.96% 1.09%

Total 100.00% 57.00% 20.74% 15.29% 6.97%

Income TotalDSR

2013

2014


Billion of Rp

Sem I

2011

Deposits Credit Net

Sem II Sem I

2012

Sem II Sem I

2013

Sem II Sem I

2,337.48

1,653.27

684.20

2014

Sem II

2500

2000

1500

1000

500

0

(trillion of rupiah)

Provincial Netto Deposits / (netto loans) Provincial Netto Deposits /

(netto loans) Provincial Netto Deposits / (netto loansn)

1. DKI Jakarta 444.77 DKI Jakarta 456.73 DKI Jakarta 593.892. Jatim 83.15 Jatim 68.45 Jatim 94.303. Sumut 40.15 Sumut 32.46 Sumut 43.714. Kaltim 15.71 Kaltim 13.76 Kaltim 21.245. DIY 10.00 DIY 8.85 DIY 11.396. Bali 8.26 Kepri 6.12 Kepri 9.707. Kalbar 6.65 Bali 5.86 Bali 6.828. Kepri 6.23 Jateng 3.95 Jateng 6.819. Kep. Babel 4.75 Kalbar 3.43 Kalbar 5.06

10. Papua 4.51 Papua 1.98 Papua 4.9711. Jateng 4.51 Kep. Babel 1.78 Kep. Babel 4.4812. Kalsel 4.44 Kalsel 0.37 Kalsel 2.8613. Papua Barat 1.63 Riau 0.19 Riau 2.6614. Maluku 1.23 Maluku (0.45) Maluku 1.4415. Riau 0.38 Papua Barat (0.88) Papua Barat 1.2116. Kalteng 0.11 NAD (1.48) NAD (0.25)17. Malut (0.00) Malut (2.37) Malut (0.40)18. Sumsel (0.06) Kalteng (3.91) Kalteng (2.14)19. Sulbar (1.67) Sumsel (3.96) Sumsel (2.43)20. NTT (1.98) Sulbar (4.41) Sulbar (2.44)21. Sultra (2.77) NTT (5.18) NTT (3.63)22. Gorontalo (3.49) Lampung (5.74) Lampung (4.63)23. Jambi (4.36) Sultra (6.24) Sultra (5.21)24. NAD (4.39) Gorontalo (6.32) Gorontalo (5.39)25. Sulut (4.75) Sulteng (6.32) Sulteng (5.92)26. Sulteng (5.07) Jambi (6.44) Jambi (5.93)27. Bengkulu (5.18) Bengkulu (6.84) Bengkulu (7.09)28. NTB (5.41) NTB (6.91) NTB (7.83)29. Lampung (5.59) Sulut (7.25) Sulut (8.57)30. Sulsel (6.47) Sumbar (10.30) Sumbar (8.69)31. Sumbar (6.47) Sulsel (13.04) Sulsel (8.95)32. Banten (7.50) Banten (13.41) Banten (11.57)33. Jabar (12.41) Jabar (28.05) Jabar (28.12)

558.90 464.44 684.20

2014

No.

Total

2012 2013

3.1.4 Deposits and Personal Loans in Banking Sector


25

20

15

10

5

yoy (%)

Sem II -12Sem I -12 Sem II -13Sem I -13 Sem II -14Sem I -14

24.36

21.24

18.90

Individual Non Individual Total Industry

13.77

18.63

15.81

18.23

14.16

10.96

15.45

13.60

12.22

14.0213.64

13.18

13.09

12.29

11.27

100908070605040302010

0

Deposits

Share (%)

Sem II -13

Sem II -14

Sem II -13

Sem II -14

Sem II -13

Sem II -14

Sem II -13

Sem II -14

Giro Saving Total

50.23

49.77

48.78

51.27

84.32

15.68

84.43

15.57

6.42

93.58

6.37

93.63

43.59

56.41

43.19

56.81

Individual Non-Individual

100908070605040302010

0

Share (%)

Sem I - 12 Sem II - 12 Sem I - 13 Sem II - 13 Sem I - 14 Sem II - 14

53.65

7.69

38.66

55.15

7.16

37.68

54.74

6.79

38.47

54.92

6.43

38.65

52.53

6.21

41.26

51.46

5.94

42.60

Term Deposits Demand Deposits Savings

Demand DepositsTerm Deposit Total SavingsTerm Deposit Rate (LHS) Interest Rate Spread between Term Deposits and Savings (LHS)

9

8

7

6

5

4

3

2

1

0

40

35

30

25

20

15

10

5

0

-5

yoy (%) yoy (%)

Sem I - 12 Sem II - 12 Sem I - 13 Sem II - 13 Sem I - 14 Sem II - 14


Individual Non Individual

100

80

60

40

20

0

2012 2013 2014

(%)


50.96%

49.04%

52.19%

47.81%

53.24%

46.76%

54.81%

45.19%

55.03%

44.97%

55.00%

45.00%

2014

2014

December

Juni

Housing

Householdequipment

Others

CREDIT (M of Rp)

CREDIT (M of Rp)Share NPL (%) Share NPL (%)

1. WORKING CAPITAL 430.47 28.95 2.85 483.32 29.24 3.312. INVESTMENT 164.77 11.08 2.81 177.22 10.72 3.453. CONSUMPTION 891.88 59.97 1.46 992.52 60.04 1.42

TOTAL 1,487.12 100.00 2.02 1,653.05 100.00 2.19

Dec-13 Dec-14type of use

Housing

45

35

25

15

5

-5

-15

Jun-

13

Jun-

14

yoy (%)

33.19

21.03

17.91

11.89

Trillion of RP NPL (%)

Household Credit (LHS) Non-Household Credit (RHS)

900

800

700

600

500

400

2.00

1.60

1.20

0.80

0.40

-

Jan-

12

Apr-1

2

Jul-1

2

Oct-1

2

Jan-

13

Apr-1

3

Jul-1

3

Oct-1

3

Jan-

14

Apr-1

4

Jul-1

4

Oct-1

4

Dec-

14


3.2 CORPORATE SECTOR ASSESSMENT

3.1.1 Corporate Performance

Housing Total

NPL (%)

2.14

1.48

1.07

0.91

3.0

2.5

2.0

1.5

1.0

0.5

-

Jan-

12

May

-12

Jul-1

2

Jan-

13

May

-13

Jul-1

3

Jan-

14

May

-14

Jul-1

4 NWB 2014 NWB 2013

12.61%

Qt I Qt II QtIII Qt IV

11.13%

23%

21%

19%

17%

15%

13%

11%

9%

7%

5%

QT I QT II QT III

2012

QT IV QT I QT II QT III

2013

QT IV QT I QT II QT III

2014

QT IV

(%)

90

85

80

75

70

65

60

TotalMining and Quarrying

Agriculture, Livestock, Forestry and FisheriesMining and Quarrying


3

ROA

12.0010.008.00

6.00

4.002.000.00

ROETA/TL

2013 Q3 2014 Q3

2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 20141 Agriculture 1.98 5.50 3.91 11.44 1.08 1.06 1.93 1.95 1.07 0.87 6.86 8.78 0.61 0.722 Basic Industries and Chemicals 5.44 4.99 11.71 10.58 1.16 1.07 1.86 1.93 1.62 1.49 5.37 5.39 0.87 0.873 Consumer Goods 12.61 12.11 23.09 23.61 0.87 1.00 2.15 2.00 1.72 1.67 4.55 4.68 1.39 1.404 3.75 3.78 8.42 9.92 1.52 1.72 1.66 1.58 1.04 0.93 77.56 68.65 0.57 0.545 Miscellaneous Industries 7.39 6.28 17.12 14.33 1.29 1.28 1.78 1.78 1.17 1.17 8.90 8.26 0.99 0.926 Mining 0.01 -0.31 0.04 -0.88 1.76 1.96 1.57 1.51 1.16 0.97 11.76 12.26 0.55 0.547 Pro erty and Real Estate 7.69 6.59 15.50 13.72 1.10 1.06 1.91 1.94 1.77 1.77 2.01 1.88 0.40 0.378 rade. Services and Investment 5.62 1.93 10.22 3.62 0.84 0.91 2.19 2.10 1.63 1.59 7.38 7.75 1.03 0.97

5.21 4.41 11.12 9.84 1.21 1.25 1.83 1.80 1.40 1.31 6.59 6.59 0.79 0.77

Asset TO

Agregat

No. SectorROA (%) ROE (%) DER TA/TL Current Ra o Inventory TO

% qtq % NWB

5.0

4.0

3.0

2.0

1.0

0.0

-1.0

-2.0

-3.0

25.0

20.0

15.0

10.0

5.0

0.0

2012 2013

QT I QT II QT III QT IV QT I QT II QT III QT IV QT I QT I*QT II QT III QT IV

GDP Growth (LHS)Actual

NWB as per Business Survey (RHS)Projected


4

2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014 2013 2014Crude Palm Oil 2.70 4.44 5.08 9.23 1.06 1.07 1.94 1.94 0.95 0.79 0.58 0.71 7.56 9.56Rubber -3.56 -3.13 -6.80 -6.74 1.06 1.27 1.95 1.79 1.23 0.62 0.20 0.28 8.59 12.85Coal -2.60 -1.49 -8.27 -5.28 2.43 2.86 1.41 1.35 1.08 0.82 0.61 0.64 14.06 16.53

0.58 -1.46 4.48 -8.35 4.27 5.26 1.23 1.19 0.73 0.80 0.98 0.96 5.18 4.99

Current Ra o Asset Turnover Inventory TOSector

ROA (%) ROE (%) DER TA/TL

ROA

Coal Crude Palm OilRubber

% 15

10

5

0

-5

-10

2012 2013 2014

QT I QT II QT III QT IV QT I QT II QT III QT IV QT I QT II QT III QT IV

CURRENT RATIO


% 1.8

1.6

1.4

1.0

0.8

0.6

0.4

0.2

0.0

2012 2013 2014


DER


% 8

7

6

5

4

3

2

1

0

2012 2013 2014


INVENTORY TURNOVER


% 30

25

20

15

10

5

0

2012 2013 2014



3.2.2 Bank Exposure to the Corporate Sector

Safe Zone Distress Zone Grey Zone

50

45

40

35

30

25

20

%

42.56% 42.53%

Crisis Period

41.01% 41.48%

34.08%

24.44%

Shar

e

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Mar

-14

Sep-

14

GDP (rhs) Distress Zone

45

40

35

30

25

20

4.0

4.5

5.0

5.5

6.0

6.5

7.0Crisis Period

Share (%) yoy (%)

Mar

-08

Sep-

08

Mar

-09

Sep-

09

Mar

-10

Sep-

10

Mar

-11

Sep-

11

Mar

-12

Sep-

12

Mar

-13

Sep-

13

Mar

-14

Sep-

14

ROA (%) ROE (%)

25

20

15

10

5

0

%

Mar

-07

Ags-

07

Jan-

08

Jun-

08

Nov-

08

Apr-0

9

Sep-

09

Feb-

10

Jul-1

0

Des-

10

Mei

-11

Okt-1

1

Mar

-12

Ags-

12

Jan-

13

Jun-

13

Nov-

13

Apr-1

4

Sep-

14

DER TA/TL

2.5

2.0

1.5

1.0

0.5

%

Mar

-07

Ags-

07

Jan-

08

Jun-

08

Nov-

08

Apr-0

9

Sep-

09

Feb-

10

Jul-1

0

Des-

10

Mei

-11

Okt-1

1

Mar

-12

Ags-

12

Jan-

13

Jun-

13

Nov-

13

Apr-1

4

Sep-

14

Inventory Turnover (LHS) Asset Turnover (RHS)

%10.0

9.0

8.0

7.0

6.0

5.0

1.0

0.9

0.8

0.7

0.6

0.5

Mar

-07

Aug-

07

Jan-

08

Jun-

08

Nov

-08

Apr-

09

Sep-

09

Feb-

10

Jul-1

0

Dec-

10

May

-11

Oct

-11

Mar

-12

Aug-

12

Jan-

13

Jun-

13

Nov

-13

Apr-

14

Sep-

14


3.2.3 Private External Debt

2010

BUKU 1 BUKU 2 BUKU 3 BUKU 4

%100

90

80

70

60

50

40

30

20

10

0

Mar Jun

Sep

Dec

2011

Mar Jun

Sep

Dec

2012

Mar Jun

Sep

Dec

2013

Mar Jun

Sep

Dec

2014

Mar Jun

Sep

Dec

Dec'13 Dec'14Dec'13 (yoy)

Dec'14 (yoy) Dec'13 Dec'14

Crude Palm Oil 188.81 4.31 5.19 31.95 20.60 0.84 1.19 Rubber 24.98 0.70 0.69 20.83 (2.49) 1.22 3.06 Coal 46.15 1.22 1.27 7.09 4.09 1.39 7.03

122.45 2.92 3.37 24.35 15.32 2.17 3.57

CommodityOutstanding creditas of December 2014

(Trillion of Rp )

Share of TotalCredit (%) Growth (%) (%)

No Economic Sector

Outstanding

December Credit as of

2014 (Trillion of Rp )

Share (%)Growth as

of December 2014. yoy (%)

Gross NPL

December 2013 (%)

Gross NPL

of December 2014 (%)

1 Agriculture 137.98 7.45 12.83 0.49 1.032 Mining 131.95 7.12 11.01 1.42 2.393 Manufacturing 570.01 30.78 13.99 1.60 1.774 77.25 4.17 2.52 0.76 1.975 Con truc 115.66 6.24 29.23 3.77 4.666 Trade Hote and Re taura 356.82 19.27 11.07 1.82 2.617 150.16 8.11 6.29 1.90 2.848 269.29 14.54 2.10 0.69 0.869 28.92 1.56 32.69 1.80 3.1010 14.12 0.76 59.32 0.38 1.79

1852.16 100 11.37 1.50 2.08Total


5

Government + Central Bank Private Total ULN

Million of USD

292.58

163

129.74

350

300

250

200

150

100

50

-

Dec-

03

Dec-

04

Dec-

05

Dec-

06

Dec-

07

Dec-

08

Dec-

09

Dec-

10

Dec-

11

Dec-

12

Dec-

13

Mar

-14

Oct-1

4

Nov-

14

Dec-

14

2009 2010 2011 2012 2013 2014

1 Financial, Leasing & Corporate Services 15,981 21,048 28,390 34,862 37,292 47,528 29.19

2 Manufacturing 19,336 19,471 22,646 25,637 29,464 32,573 20.00

3 Mining and Quarrying 12,103 10,842 16,878 20,346 26,731 26,480 16.26

4 , Gas and Sanitary Water) 9,707 13,142 14,946 16,855 17,028 18,523 11.37

5 4,739 6,272 8,108 10,080 10,110 12,207 7.50

6 3,744 3,157 4,919 6,565 7,814 9,492 5.83

7 Agriculture, Livestock, Foresty and Fisheries 4,063 4,637 4,969 5,744 7,326 7,911 4.86

8 Others 3,242 4,130 4,537 4,852 5,104 6,136 3.77

9 Services 400 769 584 637 975 1,200 0.74

10 291 320 755 667 519 792 0.49

73,606 83,789 106,732 126,245 142,364 162,843 100

Millions of USD

Total

No cono ic Sector Share in2014 %)


2010 2011 2012 2013 201411,947 15,785 19,413 22,740 40,288 76.92

Financial, Leasing and Corporate Services 1,225 1,740 1,685 1,622 14,408 27.51Manufacturing 3,871 5,912 7,664 8,261 10,889 20.79

2,496 3,046 4,040 4,072 4,474 8.54Agriculture, Livestock, Foresty and Fisheries 1,044 992 1,599 2,760 3,036 5.80Mining and Quarrying 1,190 1,368 1,719 2,189 2,561 4.89Hotels and Restaurants (THR) 788 1,234 1,424 1,295 2,167 4.14

, Gas and Sanitary Water) 827 899 832 1,883 1,926 3.68204 332 157 309 447 0.85

Others 174 221 253 311 339 0.65Services 127 43 40 37 39 0.08

10,392 11,491 10,872 11,275 12,086 23.08, Gas and Sanitary Water) 4,404 3,840 4,032 4,017 4,022 7.68

Mining and Quarrying 2,364 3,952 2,733 3,230 2,444 4.67Financial, Leasing and Corporate Services 242 188 970 823 2,201 4.20

1,053 1,160 1,190 1,187 1,195 2.28Manufacturing 1,493 1,356 1,092 1,056 1,074 2.05Trade, Hotels and Restaurants (THR) 157 546 498 737 879 1.68Others 295 189 189 193 238 0.45Agriculture, Livestock, Foresty and Fisheries 163 - - 33 34 0.06

- 93 - - - 0.00Services 220 167 167 - - 0.00

22,339 27,276 30,285 34,014 52,374 100

2, A liate

Total (1+2)

NoMillions of USD Share in

2014 (%)cono ic Sector

1, P


Box 3.1 Indonesia Household Survey of 2014

Household Balance Sheet Overview


ASSETS

CA

TLSTd

LTd

FA

TA

TL/FA =3,32%

TL/TA =2,98%

Net Worth

Short-Term Debt

Long-Term Debt

Debt + Net Worth

TL/CA =33,92%

Current Assets

Restricted AssetsInvestment

Fixed Assets

Other Assets

Total Assets

LIABILITIES

Property Others (motor vehicles, Household Equipment & clothing)

Financial Assets

2010 2011 2012 2013 2014

%100

90

80

70

60

50

40

30

20

10

0

76,72 74,48 79,01 78,47 76,93

17,54 16,91 14,10 15,88 16,61

5,74 8,61 6,89 5,65 6,46


Total debt/Total Assets Total debt/Fixed AssetsTotal debt/Current Assets (RHS)

% %4,50

4,00

3,50

3,00

2,50

2,00

40,00

35,00

30,00

25,00

20,00

15,002010 2011 2012 2013 2014

3,61

3,30 3,33

2,62

2,98

35,15

26,59

33,49

24,94

33,924,06

3,81 3,71

2,96

3,32

Bank Deposits Nonbank DepositsInvestment Others (Business and Non-Business Accounts Receivable)

2010 2011 2012 2013 2014

%100

90

80

70

60

50

40

30

20

10

0

49,81 74,48 50,30 55,29

67,72

40,98 29,2311,23

14,50

3,92 2,71 0,35 2,27 6,55

35,67 42,76

10,607,01 6,59

13,20

Total Debt/income Short-Term Debt /IncomeBank Debt /IncomeLong-Term Debt /Income

%20,00

15,00

10,00

5,00

0,00

2010 2011 2012 2013 2014

3,78 3,03 2,582,12

8,18

13,09 12,3913,46

9,97

13,10

15,75 14,9516,80

12,96

10,73

19,53 17,98 18,93

15,54

18,91


Box 3.2 Financial Account

Debtor byresidency andby resident sector

Non-resident

Resi

dent

s

ResidentsNon-

residents creditors

Creditor by residency and byresident sector


PerbankanBank Sentral

IKNB

Luar Negeri

Pemerintah

Rumah Tangga KorporasiSEKTOR

DOMESTIK

SEKTOR

LN

Uang kartal

Uang kartal

Loan

Loan DPK

SBN

SimpananPempus/Pemda

SBN

SimpananValas di LN

SBN Asing

DPK

EquityLoan

SuratBerharga

Giro

Pemerintah

Pinjamandari LN

Loan

SBI & TD Valas

Loan

Financial Corpora on

DPK

SBN

75

Chapter 4. Risk Assessment of the Banking and Nonbank Financial Industries4Risk Assessmentof the Banking and

Non-bank Financial Industries

76

Chapter 4. Risk Assessment of the Banking and Nonbank Financial Industries

77


4.1 THE BANKING SECTOR

4.1.1 Assessment of Liquidity and Risk

Chapter 4 Risk Assessment of the Banking and Non-bank Financial Industries

78


25% 140%

120%

100%

80%

60%

40%

20%

0%

20%

15%

10%

5%

2012 2013 2014

0%

Jan

Feb

Mar

Apr

May Jun Jul

Aug

Sep

Oct

Nov Dec Jan

Feb

Mar

Apr

May Ju

n Jul

Aug

Sep

Oct

Nov Dec Jan

Feb

Mar

Apr

May Ju

nJu

nJu

nJu

nJu

nJu

nM2 (% yoy) M1 (% yoy) AL/NCD (%) - rhs

120

110

100

90

%

80

70

60

50Jun’12 Dec’12 Jun’13

AL/NCD

Dec’13 Jun’14 Dec’14

Primary (%)Secondary (%)LDR (%)Foreign Exchange (%)

62.5219.54

3.4214.53

63.1519.73

2.3814.74

62.9519.67

1.7115.67

55.7627.88

0.7615.61

56.1428.07

0.4815.31

56.1628.08

0.6415.13

Statutory ReserveRequirement

Sem I-2012 Sem II-2012 Sem I-2013 Sem II-2013 Sem I-2014 Sem II-2014

0

200

400

600

800

1000

1150

1200

0

100

200

300

400

500

600

700

800

12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12 1 2 3 4 5 6 7 8 9 10 11 12

2011 2012 2013 2014

Trillion of Rp Trillion of Rp

Primary Reserves Secondary ReservesTer ery Reserves Liquid Assets

79


Sem I-2012 Sem II-2012 Sem I-2013 Sem II-2013 Sem I-2014 Sem II-2014

Credit (T of Rp) 78.32 90.26 99.36 109.59 117.86 129.18 Deposits (T of Rp) 111.21 112.12 130.43 127.89 152.61 157.51 LDR (%)

Credit (T of Rp)Deposits (T of Rp)LDR (%)




70.42 80.51 76.18 85.69 77.23 82.01

490.74 546.17 600.01 677.39 723.06 762.54 598.58 609.06 676.71 686.92 768.22 789.72

81.98 89.67 88.67 98.61 94.12 96.56

877.92 939.64 1,007.13 1,116.03 1,181.50 1,229.52 922.95 1,013.17 1,044.97 1,172.81 1,198.57 1,243.50

95.12 92.74 96.38 95.16 98.58 98.88

1,005.92 1,131.80 1,252.62 1,389.86 1,445.75 1,553.07 1,323.09 1,490.85 1,522.31 1,676.34 1,715.10 1,923.69

76.03 75.92 82.28 82.91 84.30 80.73

2,452.90 2,707.86 2,959.12 3,292.87 3,468.16 3,674.31 2,955.83 3,225.20 3,374.42 3,663.97 3,834.50 4,114.42

82.99 83.96 87.69 89.87 90.45 89.30

BUKU 1

BUKU 2

BUKU 3

I stry

BUKU 4

12.29%

13.53%

6.42%0%

5%

10%

15%

20%

25%

30%

35%

40%

May

-12

Jul-

12

Au

g-1

2

Oct

-12

De

c-1

2

May

-13

Au

g-1

3

Oct

-13

De

c-1

3

May

-14

Au

g-1

4

Oct

-14

De

c-1

4

Semester I Semester II Semester I Semester II Semester I Semester II

Jan

-12

Feb

-12

Mar

-12

Ap

r-1

2

Jun

-12

Sep

-12

No

v-1

2

Jan

-13

Feb

-13

Mar

-13

Ap

r-1

3

Jun

-13

Jul-

13

Sep

-13

No

v-1

3

Jan

-14

Feb

-14

Mar

-14

Ap

r-1

4

Jun

-14

Jul-

14

Sep

-14

No

v-1

4

Deposit Growth (yoy) Rupiah deposit growth (yoy) Foreign Currency Deposit Growth (yoy)

(150)

(100)

(50)

- 50

100

150

200

250

Non R

esid

enLo

cal G

over

nmen

tCe

ntra

l Gov

ernm

ent

Priva

te-O

ther

s

Priva

te-C

orpo

rate

Priva

te-In

divid

ual

Priva

te-F

inan

cial

Sem I - 2014 Sem II -2014


Java 76.09 76.77 76.71Sumatra 11.88 11.45 11.56Kalimantan 4.99 4.76 4.52Sulawesi 2.99 2.92 2.97Bali and Nusa Tenggara 2.56 2.60 2.68Papua and Maluku Islands 1.50 1.50 1.57

Share of Deposits (%)Island

2012 2013 2014

Market Share inSemester II 2014 (%)

BUKU 1 28.74 20.45 17.28 14.07 17.00 23.16 3.83BUKU 2 23.51 14.19 13.05 12.78 13.52 14.97 19.19BUKU 3 20.93 18.12 13.22 15.76 14.70 6.03 30.22BUKU 4 19.87 15.19 15.06 12.44 12.66 14.76 46.75Industry 21.24 16.08 14.16 13.60 13.63 12.29 100.00

Deposits Growth (%) Sem II 2013 Sem I 2014Sem I 2012 Sem II 2012 Sem I 2013 Sem II 2014

Demand Deposits 718.26 767.07 827.40 846.78 911.98 889.59

Saving 939.20 1,076.83 1,066.01 1,212.71 1,167.02 1,284.46

Term Deposits 1,298.37 1,381.30 1,481.02 1,604.48 1,755.50 1,940.38

Total Deposits 2,955.83 3,225.20 3,374.42 3,663.96 3,834.50 4,114.42

Sem II 2013

Sem I 2014

Sem II 2014

Industry(Rp T)

Sem I 2012

Sem II 2012

Sem I 2013

0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

Smt I 2012 Smt II 2012 Smt I 2013 Smt II 2013 Smt I 2014 Smt II 2014

Demand Deposits Savings Accounts Term Deposits <Rp2 billion Term Deposits >Rp2 billion


8.30

8.58

7.0

7.5

8.0

8.5

9.0

9.5

Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

(%)

BUKU 1 BUKU 2 BUKU 3 BUKU 4 INDUSTRY

-0.6

-0.4

-0.2

0.0

0.2

0.4

0.6

0.8

Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14

mtm

BUKU 1 BUKU 2 BUKU 3 BUKU 4 INDUSTRY

Sem I2012

Sem II2012

Sem I2013

Sem II2013

Sem I2014

Sem II2014

BUKU 1 27.20 17.73 11.38 8.59 16.29 24.23 BUKU 2 11.27 7.04 9.55 11.75 9.34 10.93 BUKU 3 0.92 2.44 7.79 14.00 19.22 8.65 BUKU 4 9.05 4.73 1.82 7.40 16.41 18.91 INDUSTRY 7.48 5.17 6.09 10.71 15.99 13.90

BUKU 1 29.68 30.47 33.90 28.59 16.82 33.77 BUKU 2 32.00 2.24 12.82 17.55 17.82 34.69 BUKU 3 30.63 29.03 19.51 19.31 17.28 7.62 BUKU 4 10.00 8.85 19.79 18.87 25.06 40.18 INDUSTRY 23.66 16.10 18.61 19.20 19.83 24.58

Deposits Growth (yoy.%)TERM

DEPOSITS

<= 2M

> 2M


12.36 12.65 14.30

5.13

26.85

19.90

(3.68)

19.20

11.83

2.06

11.58

(10)

(5)

-

5

10

15

20

25

30

35

40(%

Trad

eOth

ers

Man

ufac

turin

g

Agric

ultu

reCo

rpor

ate S

ervic

esSo

sial S

ervic

esM

inin

g

)

II-2013 I-2014 II-2014

11.58%

12.40%

7.68%

6%

11%

16%

21%

26%

31%

36%

Jan

-12

Fe

b-1

2M

ar-

12

Ap

r-1

2M

ay

-12

Jun

-12

Jul-

12

Au

g-1

2S

ep

-12

Oc

t-1

2N

ov-1

2D

ec-

12

Jan

-13

Fe

b-1

3M

ar-

13

Ap

r-1

3M

ay

-13

Jun

-13

Jul-

13

Au

g-1

3S

ep

-13

Oct

-13

No

v-1

3D

ec-

13

Jan

-14

Fe

b-1

4M

ar-

14

Ap

r-1

4M

ay-

14

Jun

-14

Jul-

14

Au

g-1

4S

ep

-14

Oc

t-1

4N

ov-1

4D

ec-

14

Semester I Semester II Semester I Semester II Semester I Semester II

Loan Growth (yoy) Rupiah Loan Growth (yoy) Foreign Currency Growth (yoy)

10.83 13.16

11.49

-

5

10

15

20

25

30

35

40

Working Capital Loan Investment Loan

(%)

II-2013 I-2014 II-2014

12.40

7.68

11.58

-

5

10

15

20

25

30

35

40

Rupiah Foreign Currency Total

(%)

I-2012 II-2012 I-2013 II-2013 I-2014 II-2014


2012 2013 2014

Java 74.39 74.92 75.16Sumatra 13.26 12.89 12.70Kalimantan 4.38 4.37 4.25Sulawesi 4.43 4.25 4.26Bali and Nusa Tenggara 2.46 2.48 2.53Papua and Maluku Islands 1.09 1.09 1.10

IslandLoan Share (%)

Market Share inSemester II 2014 (%)

BUKU 1 26.97 30.10 25.87 20.64 18.23 17.66 3.69BUKU 2 29.51 24.74 21.57 23.57 20.14 12.54 21.25BUKU 3 26.04 20.34 15.00 19.03 17.52 10.12 32.79BUKU 4 23.59 23.99 24.53 22.80 15.42 11.74 42.27Industry 25.75 23.08 20.64 21.60 17.20 11.58 100.00

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Loan Growth (%) Sem I 2012 Sem II 2012

15.09

19.74

10.00

12.00

14.00

16.00

18.00

20.00

22.00

-

100

200

300

400

500

600

700

800

Jan

-13

Feb

- 13

Mar

-13

Apr

-13

May

-13

Jun

-13

Jul-

13

Aug

- 13

Sep

-13

Oct -

13

Nov

-13

Dec

- 13

Jan

-14

Feb

- 14

Mar

-14

Apr

-14

May

-14

Jun

-14

Jul-

14

Aug

- 14

Sep

-14

Oct-

14

Nov

-14

Dec

- 14

(%)Trillion of Rp

Medium Enterprises Small Enterprises Micro Enterprises MSME Loan GrowthMSME Loan Share (RHS)


16.96%

19.64%

15.7%12.30%

-10%

0%

10%

20%

30%

40%

50%

60%

Jan

-13

Feb

- 13

Mar

-13

Apr-

13

May

-13

Jun

-13

Jul-

13

Aug

-13

Sep

-13

Oct

- 13

Nov

-13

Dec

-13

Jan

-14

Feb

- 14

Mar

- 14

Apr

-14

May

-14

Jun

-14

Jul-

14

Aug

-14

Sep

-14

Oct

-14

Nov

-14

Dec

-14

Manufacturing

(in percents/ %)

BUKU 1BUKU 2BUKU 3BUKU 4

41.897.78

27.4820.50

25.5318.9528.61

6.09

15.2522.3415.8414.09

17.2817.83

5.0922.39

18.0861.0411.89

9.58

16.5446.05

4.8113.28

5.4712.1431.5750.82

5.4312.8634.6447.07

5.6412.8234.0347.51

5.5213.1131.5149.86

5.4817.6430.1346.78

5.5916.6428.6949.08

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014

MSME Loan Growth (yoy) MSME Loan ShareBUKUSem I 2012 Sem II 2012 Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Sem I 2012 Sem II 2012

85


(%)4.5

4.0

3.5

3.0

2.5

2.0

1.5

1.0

0.5

0.0

2008 2009 2010

Gross NPL Net NPL

2011 2012 2013 2014

2.16

1.08

5.0%4.5

3.02

1.86

Sem II 2013 Sem I 2014 Sem II 2014

Trade

Manufac

turing

Const

ruCo

rporat

e Serv

iceAgri

cultur

eSoc

ial Ser

vice

Mining

Others

3.21

4.61

1.491.83

2.252.52

1.911.42

4.03.53.02.52.01.51.00.50.0

3.02.49

2.35

1.41

Working Capital Loan

Sem II 2013 Sem I 2014 Sem II 2014

Investment Loan

2.5

%

2.0

1.5

1.0

0.5

0.0

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Gross NPL (%) Sem I 2012 Sem II 2012

Java IslandsSumatra IslandsKalimantan IslandsSulawesi IslandsBali and Nusa TenggaraPapua and Maluku Islands

2.142.461.802.761.141.91

1.912.321.652.360.891.69

1.722.602.132.630.942.17

1.602.432.472.620.862.06

1.932.883.193.321.682.85

2.012.702.972.931.203.68

86



2,172,392,152,09

2,192,161,961,62

2,182,401,951,62

1,822,221,931,43

2,162,742,481,63

2,042,822,611,49

Industry 2,18 1,87 1,91 1,78 2,17 2,16

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Gross NPL (%) Sem I 2012 Sem II 2012

3.97

7.75

14.30

0.00

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

Jan

-12

Fe

b-1

2M

ar-

12

Ap

r -1

2M

ay-1

2Ju

n-1

2Ju

l-1

2A

ug

-12

Se

p-1

2O

ct-1

2N

ov-1

2D

ec-

12

Jan

-13

Fe

b-1

3M

ar-

13

Ap

r-1

3M

ay-1

3Ju

n-1

3Ju

l-1

3A

ug

-13

Se

p-1

3O

ct-1

3N

ov-1

3D

ec-

13

Jan

-14

Fe

b-1

4M

ar-

14

Ap

r-1

4M

ay-1

4Ju

n-1

4Ju

l -1

4A

ug

-14

Se

p-1

4O

ct-1

4N

ov-1

4D

ec-

14

MSME NPL BI Rate Lending Rate of MSME Credit

87


Electricity, Gas, and Water Supply

Mining

Real Estate

Trade

Fisheries

Social Service

Manufacturing Industry

7.87%

7.47%

5.74%

4.41%

4.36%

4.32%

3.96%

3.78%

3.77%

3.66%

3.49%

3.25%

3.05%

2.79%

0.00% 2.00% 4.00% 6.00% 8.00% 10.00%

4.1.3 Assessment of Market Risk

(Trillion of Rp)

2010-S1 2010-S2 2010-S1 2010-S2 2010-S1 2010-S2 2010-S1 2010-S2 2010-S1 2010-S2

(%)

200

180

160

140

120

100

80

60

40

20

0

8

7

6

5

4

3

2

1

0

BUKU 1 Cost of Funds BUKU 4 Cost of Funds Deposit Rate (RHS)

BUKU 2 Cost of Funds BUKU 3 Cost of Funds Deposit Rate of BUKU 1 (RHS)Deposit Rate of BUKU 4(RHS)Deposit Rate of BUKU 2 (RHS) Deposit Rate of BUKU 3(RHS)

88



6,465,665,564,925,39

6,715,775,865,055,58

6,515,835,885,085,60

8,878,138,517,027,92

9,028,208,777,768,30

9,248,918,977,958,58INDUSTRY

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 20141-Month Term Deposit Rate (%) Sem I 2012 Sem II 2012


3,072,592,361,892,27

3,002,322,311,872,12

2,592,472,311,852,17

2,302,422,401,802,12

2,672,732.511,922,32

2,402,512,541,902,22INDUSTRY

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Demand Deposit Rate (%) Sem I 2012 Sem II 2012

Sumber: Bank Indonesia


3,132,872,721,592,02

3,062,602,651,481,91

2,053,082,681,421,99

3,124,052,511,432,01

2,942,962,601,421,88

2,792,922,741,351,87INDUSTRY

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Demand Deposit Rate (%) Sem I 2012 Sem II 2012


16,1011,9511,6711,5311,79

15,4311,8011,3211,2311,49

14,8111,5811,1511,2811,41

15,0412,4312,2911,7012,13

15,9613,0912,8712,0512,63

17,6113,3112,8412,2112,80INDUSTRY

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Working Capital Credit Rate (%) Sem I 2012 Sem II 2012


16,3112,4812,60

9,6111,46

16,0312,1812,22

9,6511,27

15,6511,9012,06

9,9311,14

15,9012,3012,9410,6111,83

16,9212,9913,2211,0312,24

15,9613,3013,2711,2612,36INDUSTRY

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Investment Credit Rate (%) Sem I 2012 Sem II 2012

Sumber: Bank Indonesia


15,0915,1114,8111,9113,90

14,9714,5514,7811,5713,58

14,6014,2014,4011,0713,14

14,5014,0514,4611,1413,13

14,4613,7414,7411,4613,30

14,3314,1614,8311,9013,57INDUSTRY

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014Sem I 2012 Sem II 2012

89


7%

6%

5%

4%

3%

2%

1%

0%Jun-10

BUKU 1

Dec-10 Jun-11 Dec-11 Jun-12 Dec-12 Jun-13 Dec-13 Jun-14 Dec-14

BUKU 2 BUKU 3 BUKU 4 Industry

(in trillions of rupiah)

PeriodJun-12Dec-12Jun-13Dec-13Jun-14Dec-14

0.2819.0820.8019.1920.9520.87

(0.16)(0.56)0.972.774.924.44

< 12 month > 12 month

Value (trillions of rupiah) Jun-13 Dec-13

BUKU 4Trading

AFSHTM

BUKU 3Trading

AFSHTM

BUKU 2Trading

AFSHTM

BUKU 1Trading

AFSHTM

INDUSTRYTrading

AFSHTM

TradingAFS

HTM

TradingAFS

HTM

TradingAFS

HTM

TradingAFS

HTM

TradingAFS

HTM

1.1067.4331.46

22.9762.2614.77

29.6641.0929.25

4.2955.9539.77

9.9661.8428.20

0.5472.6226.84

13.7668.8517.39

13.6149.0137.38

3.3347.1249.55

6.0867.4526.47

1.2966.5332.18

14.0061.5624.45

22.1551.1126.75

2.6235.5261.86

8.0662.1629.77

1.0968.3930.51

21.8958.0920.02

20.9852.7726.25

4.9135.1259.98

9.3962.9427.67

169.771.88

114.4853.4147.4910.4929.57

7.0145.8613.6018.8413.42

3.080.131.721.23

266.2026.52

164.6175.07

148.860.80

108.1039.9566.04

9.0945.4611.4843.20

5.8821.1716.15

3.180.181.501.57

261.2715.88

176.2369.16

180.231.97

123.2655.0070.9915.5441.2414.2153.6611.2628.3114.09

3.320.161.161.99

308.1928.93

193.9885.28

185.102.39

123.1459.5672.4610.1444.6017.7159.9113.2730.6216.02

3.800.101.352.35

321.2625.90

199.7195.65

Jun-14 Dec-14Share ofTotal (%) Jun-13 Dec-13 Jun-14 Dec-14

BUKU 4

BUKU 3

BUKU 2

BUKU 1

INDUSTRY


* Sem II P/L is a delta of P/L at yearend subtracted by Sem I P/L Source: Bank Indonesia

2012 - I 2012 - II 2013 - I 2013 - II 2014 - I 2014 - II 2012 - I 2012 - II 2013 - I 2013 - II 2014 - I 2014 - IIBUKU 1 1.52 1.61 1.83 1.81 1.68 1.32 1.23 1.04 1.52 1.22 1.36 0.74BUKU 2 10.74 9.99 11.47 12.00 13.31 11.12 8.09 7.34 8.69 8.40 10.51 7.77BUKU 3 16.08 15.07 16.17 16.72 16.96 11.74 12.47 11.26 12.56 12.75 13.49 8.98BUKU 4 29.82 34.67 34.89 42.23 41.52 45.94 23.94 27.45 28.34 33.22 33.07 36.23Industry 58.17 61.34 64.36 72.76 73.47 70.11 45.73 47.10 51.12 55.59 58.43 53.72

P/L P/L

% %

4.5 3.20

4.0

3.5

3.0

2.5

2.0

1.5

1.0

3.10

3.00

2.90

2.80

2.70

I-2012 II-2012 I-2013 II-2013 I-2014 II-2014

BUKU 1 BUKU 2 BUKU 3 BUKU 4 INDUSTRY*(RHS)

2.85

Source: Bank Indonesia, Monthly Commercial Bank Reports, processed

I II I II I II189.41 201.87 212.91 245.17 268.96 299.03

Placements at Bank Indonesia 5.76 4.22 4.55 3.49 3.27 4.55Bonds 12.36 11.67 11.94 14.37 17.32 19.89Credit 133.60 146.24 154.31 177.21 193.30 210.60

67.20 58.35 72.76 66.88 80.22 68.21Bond Sales 6.49 3.44 2.12 2.08 3.24 3.07Tradin ( ) 18.85 13.41 25.19 33.42 30.94 19.81Devidends, Commissions/Provisions/Fees 18.74 19.80 21.27 23.63 26.67 27.54Non-Opera 10.67 11.26 11.07 14.97 12.82 12.41

Income Account2012 2013 2014


I II I II I II91.67 92.04 98.75 116.36 136.06 157.78

1.13 1.52 1.74 2.10 2.24 2.3750.45 50.05 52.86 63.50 79.56 93.37

2.62 2.53 2.80 3.08 3.51 3.491.24 1.21 1.18 1.31 1.76 1.75

34.82 36.70 38.78 46.35 47.46 56.84109.10 109.31 124.89 126.21 138.92 139.92

4.51 1.20 2.01 0.95 1.66 0.9215.23 10.82 21.67 27.02 27.18 16.70

3.59 4.02 4.26 4.55 4.76 5.1324.03 20.31 26.99 14.67 27.38 27.7029.60 33.41 35.02 36.77 39.62 41.13

8.33 8.80 8.74 11.69 13.56 11.83

Cost Account2012 2013 2014

Source: Bank Indonesia


6.263.384.854.93

6.564.024.865.05

6.634.264.555.09

6.704.254.565.28

5.893.503.425.10

5.823.543.445.10

INDUSTRY* 5.38 5.49 5.43 4.89 4.22 4.23

Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014NIM Sem I 2012 Sem II 2012


%70

65

60

55

45

50

40

35

I-2012

BUKU 1 BUKU 2

II-2012 I-2013 II-2013 I-2014 II-2014

BUKU 3 BUKU 4 CIR

53.21

%85

80

75

70

65

60I-2012 II-2012 I-2013 II-2013 I-2014 II-2014

BUKU 1 BUKU 2 BUKU 3 BUKU 4 INDUSTRY*(RHS)

76,29

Trillion of Rp

4,000 20

%

3,500

3,00019

18

17

16

15

2,500

2,000

1,500

1,000

500

I-2012 II-2012 I-2013 II-2013 I-2014 II-20140

Capital Risk-Weighted Assets CAR (RHS)

19.57

Sem I-2014 Sem II-2014 Sem I-2014 Sem II-2014 Sem I-2014 Sem II-2014 Sem I-2014 Sem II-2014BUKU 1 215.19 93.51 10.43 3.99 27.62 21.30 18.83 17.70BUKU 2 88.71 78.01 12.81 10.68 26.37 25.52 29.93 30.02BUKU 3 25.91 24.43 12.25 13.55 17.74 17.60 17.01 17.00BUKU 4 18.63 17.89 15.85 16.59 17.01 17.08 17.01 17.12Industry 19.45 19.57

CARHighest CAR%

Lowest CAR Average CAR


24%

22

20

18

16

14

123 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6 9 12 3 6

2014

18.01

19.57

20132012201120102009

CAR

20082007

9


19.50% 18.67%

25.92%

16.47% 17.12%

0.140.12

0.20

0.10

0.14

0%

5%

10%

15%

20%

25%

30%

Industry BUKU 1 BUKU 2 BUKU 3 BUKU 4

5.0% 7.5% 10.0% 12.5% 15.0%

-118.40

-135.29

-118.15

-131.15

-27.99

-509.79

-635.94

-580.00

-629.56

-289.63

-700 -600 -500 -400 -300 -200 -100 0

Industry

BUKU 1

BUKU 2

BUKU 3

BUKU 4

15.0% 12.5% 10.0% 7.5% 5.0%

95


19.50% 18.67%

25.92%

16.47% 17.12%18.59%

16.90%

25.10%

15.19%16.50%

0%

5%

10%

15%

20%

25%

30%

Industri BUKU 1 BUKU 2 BUKU 3 BUKU 4

-28.90

-35.52

-15.71

-25.63

-12.33

-90.55

-177.64

-81.55

-128.16

-61.65

-200 -150 -100 -50 0

Industry

BUKU 1

BUKU 2

BUKU 3

BUKU 4

500bps Increase

200bps Increase

400bps Increase 300bps Increase

100bps Increase

19.50%18.67%

25.92%

16.47% 17.12%19.36% 18.63%

25.82%

16.45%17.13%

0%

5%

10%

15%

20%

25%

30%

Industry BUKU 1 BUKU 2 BUKU 3 BUKU 4

-13.65

-0.92

-1.44

-0.53

0.23

-14.34

-4.61

-10.20

-2.64

1.14

-20

-15

-10

-5 0 5

Industry

BUKU 1

BUKU 2

BUKU 3

BUKU 4

50%

20%

40% 30%

10%

96


4.2.1 Finance Companies (FC)

291322

342

401 401 413 420

245

284 302

348 348 361 366

-

50

100

150

200

250

300

350

400

450

Dec - 11 Jun - 12 Dec - 12 Jun- 13 Dec - 13 Jun - 14 Dec - 14

Assets Financing

(Trillion of Rp)

77

102 105 106117 116 111

165179

192210

223237 246

4 45 5

8 89

-2

3

8

13

18

23

28

-

50

100

150

200

250

300

Jun-14 Dec -14Jun-13 Dec -13Jun-12 Dec -12Dec -11

Leasing Consumer Financing

( Trillion of Rp) ( Trillion of Rp)

-41.88

-6.07

-27.08

-19.20

-36.90

-155.44

-30.38

-138.41

-96.01

-184.50

-200 -150 -100 -50 0

Industry

BUKU 1

BUKU 2

BUKU 3

BUKU 4

25% Decline

10% Decline

20% Decline 15% Decline

5% Decline

19.50% 18.67%

25.92%

16.47%17.12%17.95%

18.37%

24.53%

15.51% 15.28%

0%

5%

10%

15%

20%

25%

30%

Industri BUKU 1 BUKU 2 BUKU 3 BUKU 4

97


400.00

350.00

300.00

250.00

200.00

150.00

50.00

100.00

Jun’12

101.50

178.66

3.99

105.09

191.82

5.15

105.56

209.86

5.41

117.36

222.97

7.70

115.54

237.05

8.34

110.95

245.74

9.42

Dec’12 Jun’13 Dec’13 Jun’14 Dec’14-

Leasing Consumer Financing Factoring Credit Card

(Trillion of Rp)

1.99 2.07 1.99 2.16

1.61

2.47 2.29

0.17

1.62

0.75

1.46 1.51 1.41

0.00

0.50

1.00

1.50

2.00

2.50

3.00

%

14.00%

12.00%

10.00%

8.00%

6.00%

4.00%

2.00%

0.00%

Dec’12 Jun’13

Total Financing Total Funding

Dec’13 Dec’14Jun’14

(Trillion of Rp)

Jun-12

303.

88

321.

62

337.

20 379.

32

385.

79

3856

.52

Dec-12 Jun-13 Dec-13 Jun-14 Dec-14

450.00

400.00

350.00

300.00

250.00

200.00

150.00

100.00

50.00

-

450.00

400.00

350.00

300.00

250.00

200.00

150.00

100.00

50.00

-

59.76

41.85

83.09

119.18

74.00

50.68

81.14

131.38

82.75

53.21

101.24

142.11

86.09

51.14

111.05

138.24

83.16

51.30

109.22

142.11

66.72

43.77

86.61

124.53

%60.00

50.00

40.00

30.00

20.00

10.00

0%-10%

Jun-12

27.72

18.81

53.47

25.49

22.55

51.96

31.43

24.76

43.81

23.81

26.67

49.55

21.50

23.36

55.14

27.59

22.99

49.43


>12%

10.01%-12%

98


4.2.2 Insurance Companies 2

25.00 84.00

%%

82.00

80.00

78.00

76.00

74.00

72.00

20.00

15.00

10.00

5.00

-

ROA

Jun-12

4.52

19.56

77.19

4.26

18.42

78.06

4.23

19.25

77.74

4.21

19.43

77.98

3.49

17.53

81.30

3.54

17.71

82.62


BOPO (RHS)

ROE

Life Insurance General Insurance and Reinsurance

Compulsory Insurance Social Insurance

Company Name

PT Asuransi Cakrawala Proteksi IndonesiaPT Reasuransi Maipark IndonesiaPT Asuransi Jiwa TaspenPT Brent Asuransi JiwaPT Asuransi Jiwa BCAPT Astra Aviva LifePT Fairfax Insurance IndonesiaPT Asei Reasurance IndonesiaPT Asuransi ASEI Indonesia

06-Mar-1410-Apr-1410-Apr-1405-Mei-1414-Jul-14

13-Agust-1413-Agust-1409-Okt-1421-Okt-14

New

NewNewNew

New

Fox Types of Insurance

Fox name

Split Insurance BusinessSplit Insurance Business

Licensed

99


(Trillion of Rp)

Dec-11 Dec-12 Dec-13 Dec-14

472412

523455

616

505

755

610

87.34

%

800

700

600

500

400

300

200

100

-

90

85

80

75

70

65

60

55

50

Assets Invesments

87.05

81.9480.77

Dec-11 Dec-12 Dec-13 Dec-14

Gross Claim Gross Premiums

105

145128

163

118

170134

210

%

250

200

150

100

50

-

80

75

70

65

60

55

50

69.57

62.40

71.94

78.49

Gross Claims (trillions of rupiah) Density (thousands of rupiah)

2009 2010 2011 2012 2013 2014*

%1.000

900

800

700

600

500

400

300

200

100

-

3.0

2.5

2.0

1.5

1.0

0.5

0.0

Density (LHS)

(USD/year)

(%)14.0 12.0 10.08.06.04.02.0-

6.0005.0004.0003.0002.0001.000-

SGP

MY

HK

IDN

EU

USA

UK

JPN

AUS


Mill

ion

of U

SD

Billi

on o

f USD

Jul 2

013

Aug

s 20

13

Sep

2013

Oct

201

3

Nov

201

3

Dec

201

3

Jan

2014

feb

2014

Mar

201

4

Apr

201

4

May

201

4

Jun

2014

Jul 2

014

Aug

s 20

14

Sep

2014

Oct

201

4

Nov

201

4

Dec

201

4

110

105

100

95

90

85

80

75

150

145

140

135

130

125

Insurance Industry External Debt Total External Debt

4.00

2.00

0.00

-2.00

-4.00

-6.00

-8.00

-10.00

-12.0020132012201120102009


Components

Source: Commercial Bank Monthly Report

(in billion of rupiah)

Credit Insurance Inclusion Insurance

DPK InsurancePublished SSB InsuranceLoans Received from InsuranceCapital Loan Insurance

1.526932593

114.461103.319

6.48621

4.635

2.388767

1.621135.705124.978

6.53420

4.172

2.379694

1.685141.311130.407

6.267514

4.124

853(238)1.091

26.85127.088

(219)493

(511)

Dec-13 Jun-13 Dec-14 Yoy

Components

A. Total Assets

B. Investment Assets

Term Deposits

Shares

Bonds and MTN

Government Bonds

Mutual Funds

Others

C. Non-Investment Assets

D. Equity

ROA

ROESource: Corporate Financial Statements, processed Note: up to Q3/2014

(in trillions of rupiah)

22.01

8.71

3.26

1.33

1.40

0.05

1.84

0.83

13.30

13.20

1.77

8.04%

13.41%

27.23

8.40

2.34

1.51

1.82

0.07

1.91

0.75

18.83

17.78

1.94

30.60

9.57

2.56

1.78

1.72

0.14

1.11

2.25

21.03

19.92

1.73

7.11%

10.89%

5.64%

8.66%

23.74%

-3.55%

-28.24%

13.82%

29.48%

44.20%

3.79%

-9.51%

41.61%

34.67%

2.37%

12.36%

13.86%

9.68%

17.56%

-5.45%

96.24%

-42.01%

201.16%

11.69%

12.02%

-10.01%

2012 2013 2014* 2012 -2013 (yoy)

2013 -2014* (ytd)


Deadline

31 December 201031 December 201231 December 2013

Rp40 billionRp70 billionRp100 billion

Rp100 billionRp150 billionRp200 billion

ReinsuranceLoss, General

and Social Insurance

Source: Corporate Financial Statements, processed

2014 QT 3Limit Min. Capital

1,148.83100.00

110.51100.00

923.17100.00

132.24100.00

211.40100.00

100.57100.00

YearABDA AHAP AMAG ASBI ASDM ASJT

Capital of Public Listed Insurance Companies (billions of rupiah)

2014 QT 3Limit Min. Capital

208.16100.00

1,266.32100.00

454.50200.00

15,360.95100.00

211.87100.00

YearsASRM LPGI MREI PNIN ASMI

Capital of Public Listed Insurance Companies (billions of rupiah)

600

500

400

300

200

100

0

ASBIAHAPASMI ASDM ASJT ASRM LPGI MREI PNINAMAGABDA%

Term Deposits Shares Bonds and MTN Bonds and MTN Mutual Funds Others

100

90

80

70

60

50

40

30

20

10

-

2014*20132012

37.40

15.28

16.10

0.58

21.15

9.48

27.83

18.03

21.62

0.87

22.76

8.90

26.80

18.61

17.95

1.50

11.59

23.54

%


Box 4.1Liquidity

0

100

200

300

400

500

600

700

800

900

1.000

De

c-0

5

Jun

-06

De

c-0

6

Jun

-07

De

c-0

7

Jun

-08

De

c-0

8

Jun

-09

De

c-0

9

Jun

-10

De

c-1

0

Jun

-11

De

c-1

1

Jun

-12

De

c-1

2

Jun

- 13

De

c -1

3

Jun

- 14

De

c-1

4

Jun

-15

De

c-1

5

Liquid Assets Baseline Stress Case

Trillon of Rp

0

200

400

600

800

1,000

BUKU 1 BUKU 2 BUKU 3 BUKU 4 Industry

Nov-14 Pre-Shock Post-Shock


13 %

18 %

15 %

21 %

18 %

12 %

14 %

11 %

19 %

15 %

0%

5%

10%

15%

20%

25%

BUKU 1

Pre - Shock Post - Shock


0%

5%

10%

15%

20%

25%

BUKU 1

Pre - Shock Post - Shock


18 %

22 %

16 %

21 %20 %

17 %18 %

11 %

19 %

17 %


Box 4.2Value Chain Financing to Nurture MSME Credit Expansion in the Agricultural Sector


Sumber Risiko

Risiko

Mi gasi Risiko

Skema Pembiayaan

Changing weather and land quality

HR knowledge and quality

and quality

Financing


Box 4.3 Indonesia

Dec-11

3.00%

2.502.25

2.30 2.25 2.28 2.10 2.44 2.36 2.12

0.35

0.65

0.480.480.48

0.410.460.50

0.820.85 0.77

2.10

0.97

2.00

1.50

1.00

0.50

0.00Dec-12 Dec-13 Dec-14

Insurance Pension Fund Finance Companies Mutual Funds

%

Dec

-11

Jan-

12Fe

b-12

Mar

-12

Apr

-12

May

-12

Jun-

112

Jul-1

12A

ug-1

2Se

p-12

Oct

-12

Nov

-12

Dec

-12

Jan-

13Fe

b-13

Mar

-13

Apr

-13

May

-13

Jun-

113

Jul-1

13A

ug-1

3Se

p-13

Oct

-13

Nov

-13

Dec

-13

Jan-

14Fe

b-14

Mar

-14

Apr

-14

May

-14

Jun-

114

Jul-1

14A

gu-1

4Se

p-14

Oct

-14

Nov

-14

8.88

9.50

9.00

8.50

8.00

7.50

7.00

SB Bread Poly (SB Bread)

For credit IKNB

Assets Bank (BA)

Bank IKNB

Assets IKNB (SA)

(a)

(b)DPK from IKNB

Bank Risk

Credit Risk :

aBA

Funding Risk :

bBA

IKBN Risk

bSA

aSA

Credit Risk :

Funding Risk :


35,00

30,00

25,00

20,00

15,00

10,00

5,00

-

%

BUKU 1

Dec-

11Ja

n-12

Feb-

12M

ar-1

2Ap

r-12

May

-12

Jun-

12Ju

l-12

Aug-

12Se

p-12

Oct-1

2No

v-12

Dec-

12Ja

n-13

Feb-

13M

ar-1

3Ap

r-13

May

-13

Jun-

13Ju

l-13

Aug-

13Se

p-13

Oct-1

3No

v-13

Dec-

13Ja

n-14

Feb-

14M

ar-1

4Ap

r-14

May

-14

Jun-

14Ju

l-14

Aug-

14Se

p-14

Oct-1

4No

v-14

29,72

9,86

8,61

6,77

BUKU 3BUKU 2 BUKU 4

Credit RiskFunding Risk

BU

KU 1

%

Dec-11

35.00

30.00

25.00

20.00

15.00

10.00

5.00

-

BU

KU 2

BU

KU 3

BU

KU 4

BU

KU 1

Dec-12

BU

KU 2

BU

KU 3

BU

KU 4

BU

KU 1

Dec-13

BU

KU 2

BU

KU 3

BU

KU 4

BU

KU 1

Dec-14

BU

KU 2

BU

KU 3

BU

KU 4

Data Nov-14 Stress Test Banks without NBFI credit

109

Chapter 5. Strengthening Financial System Infrastructure

Strengthening Financial System Infrastructure5

110


111


5.1 PAYMENT SYSTEM PERFORMANCE

The payment system remained sound, reliable and smooththroughout the second semester of 2014,

1

st

Chapter 5 Strengthening Financial System Infrastructure

st

th


5.1.1 Bank Indonesia Operated Payment System

5.1.2 Industry Operated Payment System

5.2 PAYMENT SYSTEM TRANSACTION PERFORMANCE


Source: Bank Indonesia

VALUE VOLUME Sem-II 2013 Sem-II 2014

(%) Sem-II 2013 Sem-II 2014

(%) (Trillion of Rp)

BI-RTGS 50,773.27 62,914.03 23.91% 8.88 9.10 2.42%

BI-SSSS 16,359.04 20,003.52 22.28% 0.06 0.08 33.55%

1,388.79 1,487.29 7.09% 54.02 55.69 3.08% System

Payment Insurance

2,113.35 2,455.78 16.20% 1,982.37 2,254.64 13.73%

ATM & ATM/DEBET

1,996.65 2,323.41 16.37% 1,859.50 2,126.30 14.35%

116.70 132.37 13.43% 122.87 128.34 4.45%

1.64 1.66 1.16% 72.91 115.58 58.52%

(Trillion of Rp)

MONEY


th

5.3 PAYMENT SYSTEM INDICATORS

5.3.1 Account Balance

3

(Trillion of Rp)2.4

270

290

310

250

230

210

190

2.2

2.0

1.8

1.6

1.4

1.2

1.0

0.8

0.6Jan 12 Jul 12 Jan 13 Jul 13 Jan 14 Jul 14

TOR (LHS) TOR Trend (LHS)Opening Balance (RHS)

0.00

0.50

1.00

1.50

2.00

BUKU 1

Sem I 2012 Sem II 2012 Sem I 2013 Sem II 2013 Sem I 2014 Sem II 2014


4


5.4 PAYMENT SYSTEM RISKS AND MITIGATION EFFORTS5

5.4.2 Liquidity Risk6

0.00

5.00

10.00

15.00

20.00

25.00

30.00


Trillion of Rp


0

4,000

3,000

3,500

2,500

2,000

1,500

1,000

500




5.4.4 Systemic Risk8 7

Ranking

2013 2014 Semester I Semester II Semester I Semester II

Bank

Bank

Bank

Bank

1 BUKU 4 293 BUKU 4 290 BUKU 4 288 BUKU 4 290 2 BUKU 4 292 BUKU 4 289 BUKU 4 288 BUKU 4 289 3 BUKU 4 292 BUKU 4 289 BUKU 4 288 BUKU 4 289 4 BUKU 4 292 Syariah 287 BUKU 4 286 Syariah 287 5 BUKU 3 286 BUKU 4 286 BUKU 3 284 BUKU 4 286 6 Syariah 286 BUKU 3 283 BUKU 3 280 BUKU 3 283 7 BUKU 3 283 BUKU 3 280 Syariah 280 BUKU 3 280 8 BUKU 3 282 BUKU 3 280 BUKU 3 279 BUKU 3 280 9 Syariah 282 BUKU 2 276 BUKU 3 278 BUKU 2 276

10 BUKU 3 281 BUKU 3 275 BUKU 3 276 BUKU 3 275

TotalCounterparty

TotalCounterparty

TotalCounterparty

TotalCounterparty


5.5 DIGITAL FINANCIAL SERVICES

2014

20,000

18,000

16,000

14,000

12,000

10,000

8,000

6,000

4,000

2,000

0

Okt Nov Dec

Number of Agents

19,708

27 28

Oct

1,866 97,071

1,024,113

Nov Dec

2014Number of Electronic Money Users

1,200,000

1,000,000

800,000

600,000

400,000

200,000

0


Individual

3%

97%

119



Box 5.1

st

th

st

st th

st

th

st


Box 5.2 Impact of Capping, Flooring and Ticket Sizing in the Bank Indonesia – Real

th

st


th

123

Future Challenges, 6

125

Chapter 6 Future Challenges, Outlook and FSS

126

6.1 FINANCIAL SYSTEM STABILITY CHALLENGES

127

2013 2014e 2015p 2013 2014e 2015p 2013 2014e 2015p 2013 2014e 2015p2.50 2.60 3.00 3.30 3.30 3.80 3.28 3.30 3.64

USAdvanced Economies

Emerging market countries in Asia

World Output

2.20 2.40 3.20 2.20 2.20 3.10 2.20 2.30 3.00J paa n 1.50 0.20 1.20 1.50 0.90 0.80 1.50 0.40 0.80Europe -0.40 0.80 1.10 -0.40 0.80 1.30 -0.43 0.85 1.30

China 7.70 7.40 7.10 7.70 7.40 7.10 7.70 7.50 7.40 7.70 7.40 7.10India 5.00 5.60 6.40 5.00 5.60 6.40ASEAN 5 5.20 4.70 5.40Indonesia 5.80 5.10 5.20 5.80 5.30 5.80 5.80 5.02 5.47Malaysia 4.70 5.70 5.30

7.20 6.20 6.40Thailand 2.90 0.50 3.50 2.90 1.60 4.50Vietnam 5.40 5.50 5.70

5.90 6.20 5.90 2.70 1.30 2.20the Middle East and North Africa 2.30 1.80 1.80 2.30 2.60 3.80Su -saharan Africa 5.20 4.50 4.70 5.10 5.10 5.80

Country/Region World Bank IMF ADB Bank Indonesia

the Philippines

6.2 OUTLOOK FOR BANK RESILIENCE AND FINANCIAL

SYSTEM STABILITY

1

6.3 POLICY DIRECTION

Policy Response in 2014

Q1

26%

24%

22%

20%

18%

16%

14%

12%

10%

Q2

2012

Q3 Q4 Q1 Q2

2013

Q3 Q4 Q1 Q2

17%

15%

2014

Q3 Q4 Q1 Q2

2015

Q3 Q4

Q1

22%

20%

18%

16%

14%

12%

10%

Q2

2012

Q3 Q4 Q1 Q2

2013

Q3 Q4 Q1 Q2

16%

14%

2014

Q3 Q4 Q1 Q2

2015

Q3 Q4

Q1

2.9%

2.7%

2.5%

2.3%

2.1%

1.9%

1.7%

Q2

2012

Q3 Q4 Q1 Q2

2013

Q3 Q4 Q1 Q2

2.4%

1.9%

2014

Q3 Q4 Q1 Q2

2015

Q3 Q4

6.3.2 POLICY DIRECTION IN 2015

132

Box 6.1

2

2

2

11.58

(4.85)

11.89

5.03

0.0

1.0

2.0

3.0

4.0

5.0

6.0

7.0

8.0

-5.0

5.0

15.0

25.0

35.0

45.0

55.0

Sep-

01

Jun-

02

Mar

-03

Dec

-03

Sep-

04

Jun-

05

Mar

-06

Dec

-06

Sep-

07

Jun-

08

Mar

-09

Dec

-09

Sep-

10

Jun-

11

Mar

-12

Dec

-12

Sep-

13

Jun-

14

Mar

-15

yoy (%)

KPR

Total Credit

yoy (%)

PDB (Rhs)

Dec

-14

1.5

2.0

2.5

3.0

3.5

4.0

Jan

-10

Jul-

10

Jan

-11

Jul-

11

Jan

-12

Jul-

12

Jan

-13

Jul-

13

Jan

-14

Jul-

14

NPL Total

NPL KPR

Ratio NPL (%)

De

c-14

2012 2013 2014Houses > 70m2 37.67 35.66 34.81 Apartments > 70m2 1.60 1.85 1.78 Other mortgage loans 60.74 62.50 63.41

Share of Total (%)House/Apartment Type

135

A

137

2

3 4

Research Report

December 2014

Abstract

Shock Propagation Mechanism

Systemic Event

Impact of the Systemic

Event

Trigger Idiosyncratic

Systemiatic

Tahapan Build up phase

Shock materialization

Ampli cation propagation

Origin Endogenous

Exogenous

Type Market failure

Financial institution failure

Dimension The severity of systemic event

The likelihood of the occurance

Mechanism Physical exposures

Information e ects

Type Horizontal systemic risk

Vertical systemic risk

Period Temporary

Structural

Channel The borrower balance sheet

The bank balance sheet

The liquidity

External DomesticSHOCK SOURCES

BalanceSheet

FinancialMarket

CHANNELS

Real Sector InfrastructuresMarketConfidence

Credit Risk LiquidityRisk Market Risk Operational

Risk

SYSTEMIC RISK

ExogenousEndogenous

Common/systematicIdiosyncratic

Transmission period:Short termLong term

Transmission analysis:Cross SectionTime Series

TransmissionMeasurement can be

based on:SizeInterconnectednessComplexity

Temporary Structural

Potential Impact

Risk Transmission Phase:

Build-up period Risk Materialization period

Effect on Bank Lending

141

POTENTIALCREDITRISK IN

THEFUTURE

Y world Export Exporter’sRevenue

Exporter’s Net Worth

Credit for Exporters

Domestic GDP Firm/HHIncome

Firms/ HHNet Worth

Credit for Firm/HH

Marketexpectation Capital Inflow Stock Prices Firms Net Worth

Credit for Listed Firms

Y world WorldInvestment

CapitalInflow Deposits Loanable

Fund

Real Sector Channel

Balance Sheet Channel

Market Confidence Channel

Foreign Currency

Credit Supply

POTENTIALMARKETRISK IN

THEFUTURE

POTENTIALCREDITRISK IN

THEFUTURE

IDRAppreciation

Demand for Foreign Currency Credit

142

Y world Export Current Account Balance

IDRDepreciation

Bank’s balance sheet currency mismatch MARKET RISK

Y world Export Exporter’sRevenue

Exporter’s Debt Repayment

DefaultProbability CREDIT RISK

Domestic GDP Firm/HHIncome

Firms/ HHDebt Repayment

DefaultProbability CREDIT RISK

Marketexpectation Capital Outflow

Y world WorldInvestment Capital Inflow Deposits Liquidity LIQUIDITY RISK

Balance Sheet Channel

Real Sector Channel

Financial Market Channel

Deposits Liquidity LIQUIDITY RISK


146

Financial Asset Prices

Consumption,Investment

Risk TakingBehavior

Prices (Inflation) ...useinflation transmission

POTENTIALLIQUIDITY RISK

POTENTIALMARKET RISK

MARKET RISK Interest Rate Risk

Liquidity

Potential Bubble Burst

Credit

Asset Price Bubble Potential

Liability

MARKET RISK Confidence

POTENTIALMARKET RISK

Exchange Rate Appreciation

Potential Sudden Reversal

CapitalInflow

Volume of Transactions

FinancialMarket Channel

Market ConfidenceChannel

Real SectorChannel

FeedbackLoop

Procyclical Behavior

B/S Channel

FeedbackLoop

Financed by Non-CoreLiabilities

FeedbackLoop

Wealth Effect

147

Bubble Brust Asset Price Opportunity for Financing from Bond Market Production Economic

growthMARKETRISK

Household Balance Sheet

RepaymentCapacity

MARKET RISK Confidence

LIQUIDITYRISK

CapitalOutflow

Volume ofTransactions

LiquidityPrice of Assets held by Financial Institutions

B/S Channel


Market Confidence

Real SectorChannel

CREDITRISK

MarketLiquidity

LIQUIDITYRISK

Stock Initial Public Offering Investment Economic

growthMARKETRISK

148

PropertyPrice

PropertySector

Investment in Property

PropertySpeculation Marketing Risk Repayment

CapacityPOTENTIAL CREDIT

RISK IN THE FUTURE

ProfitCREDITRISK

LIQUIDITYRISK

POTENTIAL CREDITRISK IN THE FUTURE

CreditProperty

Speculation

Credit

MARKETRISKConfidence

POTENTIAL MARKETRISK IN THE FUTURE

PotentialBubble

Related SectorBond Prices

PotentialBubble

Property sector stock prices

PropertySector

POTENTIAL CREDITRISK IN THE FUTURE

CollateralValue

B/S Channel



Real SectorChannel

FeedbackLoop

FeedbackLoop

SUPPLY SIDE

DEMAND SIDE

PropertyPrice Burst

PropertyPrice

Opportunity for Financing Sector Property Production Repayment

Capacity

HouseholdBalance Sheet

RepaymentCapacity

MARKETRISKConfidence

LIQUIDITYRISK

Related Sector Bond Prices

Property SectorStock Prices

Property Sector Perfomance

CREDIT RISK B/S

Channel


MarketConfidence

Real Sector Channel

Property Sector Opportunityfor Financing

CREDITRISK

MacroDistress

MicroFactors

Problems in particular sector in economy

Problems in Non Bank Financial Institutions or

Parents Company

Mismanagement

Financial innovation

OperationalProcess

BusinessProcess

Mismatch

Misalocation

Currency

Maturity

HighlyConcentrated CREDIT RISK

LIQUIDITY RISK

MARKET RISK

Interconnectedness

OPERATIONALRISK

153

1

155

countries3

30,00

20,00

10,00

0,00

-10,00

-20,00

-30,00

-40,00

Bank Credit/GDP gap

1992

Q1

1993

Q1

1994

Q1

1995

Q1

1996

Q1

1997

Q1

1998

Q1

1999

Q1

2000

Q1

2001

Q1

2002

Q1

2003

Q1

2004

Q1

2005

Q1

2006

Q1

2007

Q1

2008

Q1

2009

Q1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

2014

Q1

L H

3,00

2,50

2,00

1,50

0,50

-

1,00

1992

Q119

93Q1

1994

Q119

95Q1

1996

Q119

97Q1

1998

Q119

99Q1

2000

Q120

01Q1

2002

Q120

03Q1

2004

Q120

05Q1

2006

Q120

07Q1

2008

Q120

09Q1

2010

Q120

11Q1

2012

Q120

13Q1

2014

Q1

120,00

100,00

80,00

60,00

40,00

20,00

0,00

-20,00

-40,00

-60,00

-80,00

Bank Credit/GDP gap

1992

Q1

1993

Q1

1994

Q1

1995

Q1

1996

Q1

1997

Q1

1998

Q1

1999

Q1

2000

Q1

2001

Q1

2002

Q1

2003

Q1

2004

Q1

2005

Q1

2006

Q1

2007

Q1

2008

Q1

2009

Q1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

2014

Q1

L H

3,00

2,50

2,00

1,50

0,50

-

1,0019

92Q1

1993

Q119

94Q1

1995

Q119

96Q1

1997

Q119

98Q1

1999

Q120

00Q1

2001

Q120

02Q1

2003

Q120

04Q1

2005

Q120

06Q1

2007

Q120

08Q1

2009

Q120

10Q1

2011

Q120

12Q1

2013

Q120

14Q1

5

30,00

-30,00

-40,00

-50,00

20,00

-20,00

10,00

-10,00

0,00

1,6K

Bank Credit - 1 sided HP Filter

25K 125K 400K

1992

Q1

1993

Q1

1994

Q1

1995

Q1

1996

Q1

1997

Q1

1998

Q1

1999

Q1

2000

Q1

2001

Q1

2002

Q1

2003

Q1

2004

Q1

2005

Q1

2006

Q1

2007

Q1

2008

Q1

2009

Q1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

2014

Q1

100,00

-100,00

50,00

-50,00

0,00

1,6K

Broad Credit - 1 sided HP Filter

25K 125K 400K

1992

Q1

1993

Q1

1994

Q1

1995

Q1

1996

Q1

1997

Q1

1998

Q1

1999

Q1

2000

Q1

2001

Q1

2002

Q1

2003

Q1

2004

Q1

2005

Q1

2006

Q1

2007

Q1

2008

Q1

2009

Q1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

2014

Q1

Lambda Threshold NSR Predicted1600 0,50 63% 70%

25000 3,50 25% 74%125000 3,50 28% 67%400000 3,00 32% 67%

1600 2,50 21% 74%25000 0,50 60% 67%125000 - - -400000 - - -

Bank Credit Gap

Broad Credit Gap

NPL_YOY NPL_(%) IHPR_YOY GDPR_YOY IHSG_YOY DPK_YOY CAR ROANC_GDP25K 0,49 -0,68 -0,54 0,69 0,25 0,35 -0,32 0,83BC_GDP16K 0,28 -0,34 -0,27 0,24 0,27 -0,21 0,14 0,60NC_YOY 0,14 -0,50 -0,29 0,70 -0,26 0,32 -0,39 0,44BC_YOY 0,19 -0,76 -0,19 0,80 -0,24 0,66 -0,69 0,62NPL_YOY -0,09 0,25 -0,02 0,37 -0,14 0,29NPL_(%) 0,28 -0,74 -0,03 -0,49 0,65 -0,84

Financial Imbalance IndicatorMain Indicators

dependent (y) independent (x)

NPL (%) Bank Credit Gap 15 -0,31 0,05 -5,81 0,00 0,67 0,66 1,22 68,13 0,00 3,29GDP Real (yoy) Bank Credit Gap 1 0,00 0,00 9,27 0,00 0,51 0,50 0,01 50,58 0,00 -7,31

ROA (%) Bank Credit Gap 1 0,07 0,01 7,31 0,00 0,60 0,59 0,27 70,59 0,00 0,26GDP Real (yoy) Bank Credit (yoy) 1 0,07 0,02 3,91 0,00 0,38 0,36 0,01 29,08 0,00 -7,06GDP Real (yoy) NPL (%) 1 0,00 0,00 -7,07 0,00 0,58 0,57 0,01 67,20 0,00 -7,46

CAR (%) NPL (%) 4 0,54 0,05 10,21 0,00 0,63 0,62 1,34 76,05 0,00 3,47ROA (%) NPL (%) 3 -0,08 0,01 -6,66 0,00 0,54 0,53 0,23 53,21 0,00 -0,04NPL (%) Broad Credit (yoy) 1 -18,25 2,72 -6,71 0,00 0,53 0,52 2,01 54,05 0,00 4,27

GDP Real (yoy) Broad Credit (yoy) 1 0,05 0,01 5,87 0,00 0,47 0,46 0,01 43,08 0,00 -7,23Deposits (yoy) Broad Credit (yoy) 1 0,26 0,05 5,13 0,00 0,42 0,41 0,04 34,51 0,00 -3,80

CAR (%) Broad Credit (yoy) 1 -14,13 1,62 -8,70 0,00 0,56 0,55 1,47 60,83 0,00 3,64ROA (%) Broad Credit (yoy) 1 2,31 0,47 4,89 0,00 0,40 0,39 0,33 32,57 0,00 0,65

AICProb (t) R-sqradj. R-

sqrSE Reg F-stat Prob (F)T-stat

Variableslag Coef.

Std. error

Fin_imbalance_indicator(t)=f(main_indicator(-t)),

where t=1, 2, 3…

= + 1. gap kredit + 2.

= 0, gap kredit <1, gap kredit = × gap kredit

0,85

0,75

0,65

0,55

0,5

0,45

0,40 0,5 1 1,5 2 2,5 3 3,5 4 4,5 5 5,5 6 6,5 7 7,5 8 8,5 9

Adj. R’2

threshold

0,8

0,7

0,6

Adjusted Threshold

30,00

-30,00

-40,00

20,00

-20,00

10,00

-10,00

-

Bank Credit Gap (25K) Threshold

1992

Q1

1993

Q1

1994

Q1

1995

Q1

1996

Q1

1997

Q1

1998

Q1

1999

Q1

2000

Q1

2001

Q1

2002

Q1

2003

Q1

2004

Q1

2005

Q1

2006

Q1

2007

Q1

2008

Q1

2009

Q1

2010

Q1

2011

Q1

2012

Q1

2013

Q1

2014

Q1

Threshold

n years before

credit gap mean

Y-3 2,70Y-2 4,67Y-1 6,05

*) Y-1 = one year before cri s i s

7

6

5

4

3

2

1

0

Bank Credit Gap (25K) H L1=3 L2=4 L3=5

1993

q1

1993

q2

1993

q3

1993

q4

1994

q1

1994

q2

1994

q3

1994

q4

1995

q1

1995

q2

1995

q3

1995

q4

1996

q1

1996

q2

1996

q3

1996

q4

1997

q1

1997

q2

1997

q3

10

6

8

4

2

-2

0

Bank Credit Gap (25K) H L1=3 L2=4 L3=5

2003

q1

2003

q320

04q1

2004

q320

05q1

2005

q320

06q1

2006

q320

07q1

2007

q3

2008

q1

2008

q320

09q1

2009

q320

10q1

2010

q320

11q1

2011

q3

2012

q1

2012

q320

13q1

2013

q3

2014

q3

Lag IHPR CPI ROA

-0,192112 0,552298 -0,469166

(-1,253464) (4,242126) (-3,401761)-0,10925 0,539345 -0,353659

(-0,703751) (4,101124) (-2,420977)-0,00102 0,514638 -0,30994

(-0,00653) (3,843317) (-2,087375)0,135876 0,459601 -0,282212

(0,878174) (3,313587) (-1,883599)0,329119 0,389535 -0,246078

(2,231722) (2,708155) (-1,625655)0,430384 0,308556 -0,258284

(3,053026) (2,077068) (-1,711911)0,469605 0,21917 -0,324656

(3,405843) (1,438344) (-2,197865)0,51521 0,163294 -0,370121

(3,849136) (1,059816) (-2,5511)

7

8

1

2

3

4

5

6

DIRECTOR

COORDINATOR AND EDITOR

ANALYSTS

OTHER DEPARTMENT CONTRIBUTION ON SELECTED ANALYSIS

PRODUCTION AND DISSEMINATION TEAM

Financial Stability ReviewNo.24, March 2015

chapter 5 strengthening financial system infrastructure

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