The Indonesian banking sector during the COVID-19 pandemic

Sahminan Sahminan

Chapter 38 in Handbook of Banking and Finance in Emerging Markets, 2022, pp 710-730 from Edward Elgar Publishing

Abstract: The Covid-19 pandemic has had significant impacts on the Indonesian economy, including the banking sector. The most apparent effect of the Covid-19 pandemic on the banking sector appears in the growth of bank loans. Outstanding bank credits in 2020 fell by 2.4 percent from 2019. Nonetheless, despite the drop in bank lending, overall banking sector performance during the Covid-19 pandemic remains sound. The banking sector has ample liquidity and a strong capital adequacy ratio. Meanwhile, although non-performing loans ratio increased, the level is still below 5 percent. During the Covid-19 pandemic, the banking sector also continued to record profits, although lower than in 2019. Based on categories of bank ownership, all types of banks appear to be affected by the Covid-19 pandemic, although to a different degree. So far, various policies implemented by the Indonesian authorities seem to help the banking sector mitigate the negative impacts of the Covid-19 pandemic.

Keywords: Development Studies; Economics and Finance (search for similar items in EconPapers)
Date: 2022
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