Article Abstract:
The Indonesian banking industry is undergoing changes similar to those seen in the US in the 1980s as banks seek new ways of finding fee-based income. There are 240 banks in Indonesia and competition is intense. Bank Indonesia has set a cap of 17% constraining loan growth in order to control growth of the money supply, and this measure is not likely to be reversed in the short term. Retail banking is attractive because it allows revenue to be gained from fees to help offset slower growth in loans. Syndicated loans are popular among merchant bankers in Indonesia and infrastructure projects need large amounts of finance.
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Article Abstract:
Bank Negara Indonesia (BNI), an Indonesian state-owned bank, will float on the Jakarta Stock Exchange on November 25, 1996, as the stock exchange approaches a peak. The results of top Indonesian firms, economic improvement and stable US interest rates have led to almost perfect conditions for floating. This is the first flotation of a government owned company in 1996, but there are plans for more to enable the government to settle some of the Indonesian foreign debt. The demand for BNI shares from overseas could have been boosted by a restricted offer, and the long-term outlook for the shares is uncertain.
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Article Abstract:
Indonesia's central bank, Bank Indonesia, has announced new measures aimed at strengthening the country's banks including the lifting of the bank reserve requirement from 2% to 3%. These measures are expected to result in restructuring and consolidation among many banks in the face of growing competition. Bank Indonesia's Finance Minister, Mar'ie Muhammad, ordered banks in 1995 to meet a 12% capital adequacy ratio by 2001.
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