INDONESIA - BANKING - Central bank launches three scenarios of sharia bank growth

www.bisnis.com - JAKARTA: Bank Indonesia predicts three possible growth scenarios of sharia banks next year, referring to global economy and domestic conditions.

Those scenarios are pessimistic, moderate and optimistic, said Bank Indonesia Deputy Governor Halim Alamsyah.

“In the pessimistic growth we predict loans and third party funds increase by 55%, moderate by 63%, and optimistic by 79%,” he said Wednesday on the sidelines of 2012 Sharia Banking Outlook. (source)



With optimistic target, sharia banks will post loans as much as IDR191.4 trillion and third party funds as much as IDR198.6 trillion at end of 2012. Provided such performance, sharia banks and sharia business units will have assets increase by 50% to IDR205.9 trillion.

With pessimistic target, loans will reach IDR165.3 trillion and third party fund will reach IDR171.5 trillion. Thus, assets will grow 29% to IDR177.5 trillion.

Both upper and lower targets are higher than the performance of sharia banks through October, with loans of IDR100 trillion and third party fund of IDR103 trillion.

Halim seems optimistic on the performance of new sharia banks, which has been growing rapidly in the past three years.

In addition, he is optimistic that sharia banking performance next year will not get significant influence from slower global economy on debt crisis in Europe Union and United States.

Global crisis impacts

Bank Indonesia's Director of Sharia Banking Mulya Siregar said that those three scenarios are made based on national economic conditions. The pessimistic target is based on impact from global economy that may influence domestic market and decelerate sharia bank performance.

Meanwhile, moderate target is set considering stable domestic economic condition, which may support sharia bank performance without any increase in players.

Finally, optimistic target may be reached if there is any new sharia bank or business unit starting operation in Indonesia. Currently, there are 11 sharia banks and 23 sharia business units in the country.

Ahmad Buchori, Research Head for Sharia Banks at Bank Indonesia, mentioned that there are two conventional banks to turn into sharia banks next year.

The central bank also expects more loans for productive sector. About 72% of sharia banking loan goes to service and consumer sector.

In the meantime, PT Bank Negara Indonesia Syariah predicts its performance will not meet the central bank’s optimism schenario. BNI Syariah, a subsidiary of state-controlled Bank Negara Indonesia, expects growth at 30%-40%. (T04/NOM)

Source;  http://en.bisnis.com/articles/central-bank-launches-three-scenarios-of-sharia-bank-growth - Dec 15, 2011