Apr
09

Indonesia Bad Loan Problem to Worsen, Bank Bailout Chief Says

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  • Seen containing growth below 6 percent as lenders hold back
  • Commodity prices remain volatile, bank bailout fund head says

Destry Damayanti.

Photographer: Dimas Ardian/Bloomberg

The non-performing loan problem at Indonesia’s banks is likely to get worse, keeping economic growth below 6 percent over the coming two years as lenders hold back from boosting credit, according to the head of the country’s deposit insurance agency.

“We haven’t seen the bottom for NPLs because commodity prices are still volatile and we see uncertainties that can affect our domestic economy,” Destry Damayanti, commissioner at the agency known as LPS, said in an interview at her office in Jakarta last week. “Banks are still in consolidation to resolve bad debts.”…

Indonesia Bad Loan Problem to Worsen, Bank Bailout Chief Says

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