Indonesia: Moody’s upgrades Indonesian banks to positive – 13 Jun 2017

  • Moody’s Investors Service has upgraded its outlook on the Indonesian banking system to positive from stable as it expects banks will see improvements in their operating environment over the next 12 to 18 months.
  • The ratings agency said on 12 Jun 17 that other factors were their asset quality, as well as the capacity by the government to extend support when necessary.
  • Moody’s vice president and senior credit officer Srikanth Vadlama said: “Indonesian banks will benefit from an improving operating environment in the coming 12-18 months, as economic growth picks up due to supporting macroeconomic policies and a stronger market for the country’s key commodities.
  • “Our baseline scenario assumes real GDP growth in Indonesia of 5.2% in 2017 and 5.3% in 2018, compared to 5.0% in 2016.”
  • Moody’s conclusions were contained in its just-released banking system outlook for Indonesia, “Improving operating environment drives positive outlook”.
  • The ratings agency said its assessment of Indonesia’s banking system was based on five factors: operating environment (improving); asset quality and capital (improving/stable); funding and liquidity (stable); profitability and efficiency (improving); and systemic support (improving).

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