Central Bank (Bank Indonesia/BI) reported that the financial system remains stable and the bank intermediation function is improving, while nonbank financing continues to expand. Maintained financial system stability is reflected in the high Capital Adequacy Ratio (CAR) reported by the banking industry at 22.1% and the liquidity ratio of 20.3% in May 2018.

In addition, the banking industry maintained a low level of non-performing loans (NPL) at 2.79% (gross) or 1.28% (net). Financial system stability is also contributing to improvements in the bank intermediation function. Deposit growth declined from 8.1% (yoy) to 6.5% (yoy). Credit growth accelerated from 8.9% (yoy) to 10.3% (yoy) in May 2018. BI projects stronger credit and deposit growth in 2018 at 10-12% (yoy) and 9-11% (yoy) respectively.