Restructured Loans – Time Bomb for Banks – Mon 28 Jun 2021

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(The Jakarta Post)

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Jakarta ●
Mon 28 Jun 2021

Indonesian banks expect to face continued financial stress throughout 2022 as simplified loan restructuring policies, once considered a lifeline for banks, are now poised to reduce their profitability.

Bankers and banking experts said the loan restructuring would reduce the banks’ interest income in the coming months, while interest expenses will remain unchanged and the cost of creating provisions will remain high.

Their comments relate to the OJK’s decision to expand regulation, which allowed lenders to more easily restructure loans. The validity period of POJK No. 11/2020, which expires in March 2021, has been extended by one year until March 2022.

Read also: Loan restructuring program add …

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