Banking - Banks are trying to reduce credit risk until the end of the year

Banking - Banks are trying to reduce credit risk until the end of the year Bank credit risk appears to be experiencing a downward trend. This is reflected in the Loan at Risk (LaR) ratio, which is moving down. However, several bankers remain careful about maintaining their credit risks, especially since the COVID-19 restructuring relaxation regulations have been completely lifted since March 2024. Apart from that, global economic conditions are still uncertain. If you look at the Financial Services Authority (OJK) data as of April 2024, the LaR ratio in the banking industry is at the level of 11.04%, or down from the previous month, which was at the level of 11.10%, and from the same period last year, which was at the level of 13.88%. However, the LaR figure is still slightly higher than the position at the end of the year, which was at the level of 10.94%. The amount of COVID-19 restructuring credit itself continued its downward trend to IDR207.40 tn in April 2024, compared to the March 2024 position of IDR228.03 tn. Dian emphasized that banking is in very good condition to anticipate potential deterioration. OJK assesses that the current condition of Indonesian banking has strong resilience in facing economic dynamics, supported by strong capital levels, adequate liquidity, and adequate risk management. (Source : Kontan)