Recently released market study: Indonesia Commercial Banking Report Q1 2011

Feb. 4, 2011 - PRLog -- New Regulations to Squeeze Bank Profitability  The loan-to-deposit ratio floor of 78.0%, which becomes effective in March 2011, will constrain the  profitability of Indonesian banks. We expect bank stocks to underperform the broader Jakarta Composite  Index (JCI) over the medium term.  New regulations announced by Bank Indonesia (BI) requiring commercial banks to maintain a loan-todeposit  ratio of at least 78.0% will have a broadly negative impact on commercial banks over the medium  term. In short, we expect profit margins to be squeezed and overall net income to take a hit as banks are  forced to lower their lending rates. Consequently, we expect bank stocks in Indonesia to underperform the  JCI over the coming months.  New Regulations Aimed At  Spurring Lending  The new regulations stipulate  that banks should maintain a  loan-to-deposit ratio of 78-  100%. We believe that the  78.0% floor is the main  constraint and a penalty of 0.1%  of the deposit base will be  imposed per 1.0% of shortfall in  the ratio. Regarding the 100%  ceiling, a penalty of 0.2% of the  deposit base will be imposed on  each 1.0% over the stipulated  limit unless the bank has a  capital adequacy ratio (CAR) in  excess of 14.0%. In our view,  the ceiling is less binding considering that banks with a LDR of over 100.0% generally do have a CAR of  over 14.0%. The regulations appear to be aimed at encouraging several large banks with low loan-todeposit  ratios, including Bank Mandiri (63.1%), Bank Century Asia (51.3%) and Bank Negara  Indonesia (64.5%), to boost loan growth over the coming months. These three banks account for about  30% of total loans in Indonesia and, by our estimates, they will have to loan out an additional IDR145trn  (US$16.1bn, the equivalent of 9.1% of total outstanding loans in June 2010) to meet the requirements.

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Report Table of Contents:

Executive Summary
- Table: Levels (IDRbn)
- Table: Levels (US$bn)
- Table: Levels At September 2010
- Table: Annual Growth Rate Projections 2010-2015 (%)
- Table: Ranking Out Of 59 Countries Reviewed In 2010
- Table: Projected Levels (IDRbn)
- Table: Projected Levels (US$bn)
SWOT Analysis
- Indonesia Commercial Banking SWOT
- Indonesia Political SWOT
- Indonesia Economic SWOT
- Indonesia Business Environment SWOT
Business Environment Outlook
- Commercial Banking Business Environment Ratings
- Table: Indonesia's Commercial Banking Business Environment Rating
- Commercial Banking Business Environment Rating Methodology
- Table: Asia Commercial Banking Business Environment Ratings
Global Commercial Banking Outlook
Asia Banking Sector Outlook
- Table: Banks' Bond Portfolios
- Table: Asia Commercial Banking Business Environment Ratings
- Table: Comparison Of Loan/Deposit, Loan/Asset And Loan/GDP Ratios
- Table: Anticipated Developments In 2011
- Table: Comparison Of Total Assets, Client Loans And Client Deposits, 2009-2010 (US$bn)
- Table: Comparison Of Per Capita Deposits, 2010e (US$)
- Table: Interbank Rates And Bond Yields, 2009-2010
Indonesia Banking Sector Outlook
Economic Outlook
- Table: Indonesia Economic Activity, 2008-2015
Competitive Landscape
- Market Structure
- Protagonists Tables
- Table: Protagonists In Indonesia's Commercial Banking Sector
- Definition Of Commercial Banking Universe
- List Of Banks
- Table: 10 Largest Commercial Banks
- Table: Other Indonesian Commercial Banks
- Table: Foreign Banks
Company Profiles
- Bank Mandiri
- Table: Stock Market Indicators
- Table: Balance Sheet (IDRmn, unless stated)
- Table: Balance Sheet (US$mn, unless stated)
- Table: Key Ratios (%)
- Bank Central Asia
- Table: Stock Market Indicators
- Table: Balance Sheet (IDRmn, unless stated)
- Table: Balance Sheet (US$mn, unless stated)
- Table: Key Ratios (%)
- Bank Rakyat Indonesia
- Table: Stock Market Indicators
- Table: Balance Sheet (IDRmn, unless stated)
- Table: Balance Sheet (US$mn, unless stated)
- Table: Key Ratios (%)
- Bank Negara Indonesia
- Table: Stock Market Indicators
- Table: Balance Sheet (IDRmn, unless stated)
- Table: Balance Sheet (US$mn, unless stated)
- Table: Key Ratios (%)
- Bank Internasional Indonesia
- Table: Stock Market Indicators
- Table: Balance Sheet (IDRmn, unless stated)
- Table: Balance Sheet (US$mn, unless stated)
- Table: Key Ratios (%)
- Bank Danamon Indonesia
- Table: Stock Market Indicators
- Table: Balance Sheet (IDRmn, unless stated)
- Table: Balance Sheet (US$mn, unless stated)
- Table: Key Ratios (%)
BMI Banking Sector Methodology
- Commercial Bank Business Environment Ratings
- Table: Commercial Banking Business Environment Indicators And Rationale
- Table: Weighting Of Indicators

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Fast Market Research is an online aggregator and distributor of market research and business information. We represent the world's top research publishers and analysts and provide quick and easy access to the best competitive intelligence available.