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Bank of America debit fee is only the latest

2011-10-07T11:43:00.000-07:00

NEW YORK — Angela Malerba, who works in public relations in Boston, carries a debit card because she likes to know when she buys something that she has enough in her account to pay for it. But paying $5 a month to use her own money? That’s too much.

So when Bank of America starts charging the fee next year, Malerba figures she’ll rely more heavily on her credit card. Or, in a strategy that seems almost quaint in these swipe-and-go times, she may just carry more cash.

"Paying $60 a year in debit card fees just seems absurd," she said.

The 38.7 million people who carry Bank of America debit cards will face a similar decision in the latest example of banks raising fees or establishing new ones — not just for debit cards but for visiting ATMs or talking to a teller.

Bank of America’s announcement follows tests by Wells Fargo and Chase for $3 monthly fees for debit cards in some markets. Other banks have begun charging for basic checking. Banks have sharply restricted their rewards programs for debit cards.

Bank of America said the fee will apply only when customers use their debit cards for purchases in a certain month. The fee will not apply if the card is used only to access ATMs. It will not apply for premium customers, who keep high balances.

Debit fees hit particularly hard because banks have spent the past decade encouraging their customers to go for the ease of the cards, which deduct purchases immediately from a checking or savings account.
In 1995, debit cards accounted for only 1 percent of the transactions when people pulled a card out of their wallet to pay for something. Credit cards made up the rest.

Debit cards grew steadily, hitting 50 percent in 2006. Today, there are more than 530 million of them in use in the United States. Two out of every three times someone reaches for plastic, it’s debit, according to the Nilson Report, which tracks the card industry.

Credit cards still make up 56 percent of the money spent, according to the report. So when people use debit, it’s for the forgettable, smaller transactions of everyday life — a pack of gum or a cup of coffee.

Banks have cashed in big. They collect about $19 billion a year from swipe fees, the pennies they collect from a store every time you run your card through a magnetic reader at the checkout counter.
On Saturday, that revenue will be cut almost in half. Federal rules will cap the amount banks can charge merchants at about 24 cents per transaction, down from an average of 44 cents.

It’s the latest regulation imposed on banks. Last year, strict rules on credit cards limited when they could raise interest rates and virtually eliminated customer fees for going over credit limits. Then the Federal Reserve tightened rules for when and how often banks could charge for checking account overdrafts.

But each regulation aimed at reducing the costs for consumers has chipped away at bank revenue — and left banks going so far as to make the customer pay for services that had been offered at no charge.

Bank of America, for instance, created a checking account that is free only if the customer banks online and at ATMs. Get a paper statement or visit a teller, and there’s an $8.95 fee for the month.

Bankrate.com found recently that 45 percent of non-interest-earning checking accounts are free today, down from 76 percent two years ago. Minimum balance fees, ATM surcharges, foreign transaction fees and more have also proliferated. Many banks even charge customers a fee for drawing on lines of credit linked to checking accounts, which most users seek in order to avoid overdraft fees.

Customers are frustrated. Jose Bucheli, a graduate student in Albuquerque, N.M., thought back to the economic crisis of 2008, when banks pledged to stand with customers.

"But whenever they have the opportunity, they impose a new fee," he said. "I understand that Bank of America is a business, and trying to maximize its profits, but I’m trying to maximize my profits, too."

Bucheli doesn’t like to carry cash and relies on his debit card for almost everything, so he isn’t interested in getting around the fee by using a credit card. "I can change banks and beat the fees that way," he said.

Some banks are trying to take advantage of that impulse. The regulation doesn’t apply to banks with $10 billion or less in assets, which may give some community banks and credit unions an edge.

Consumer advocates suggest credit unions as a haven from fees. BECU, a Seattle credit union, says its membership has risen 18 percent in the past year. Many of the newest members say they’re switching because of bank fees, a spokesman says.

Some larger banks are also resisting the urge to tack on charges, instead trying a no-fee strategy to lure customers. Huntington National Bank, based in Ohio, has marketed "Asterisk Free Checking" since May. Mary Navarro, director of retail and business banking there, says the growth rate for new accounts almost doubled.

"It’s not the customer’s fault that the banks have more regulation," Navarro said. "These fees, that really does impact the consumer’s wallet, and I don’t think they like it."

They may grumble, but probably few will switch banks. Bank inertia is powerful: Think of the paperwork of changing direct deposits, the hassle of redirecting automatic bill-paying setups and the difficulty of figuring out exactly what other banks charge.

"Unraveling all that is a mess, and that’s one thing that really works in the bank’s favor for retaining the customer," saud Brian Riley, research director of bank cards for TowerGroup, a consulting firm. "At the end of the day it’s just hard to change."

In Baltimore, Meredith Gould, a Bank of America customer, says she will probably grudgingly pay the $5 a month. It depends, she says, on "how consumer-guerrilla I want to get about it."

"I hate it. It’s wrong," she said. "But $5 a month — that’s less than going to the movies."

HSBC Reportedly Moves on Sale of General Insurance Business

2011-09-30T22:42:00.000-07:00

LONDON — HSBC Holdings PLC is moving ahead with the sale of its general insurance business and has approached potential buyers in Europe and Asia, a person familiar the situation told Dow Jones Newswires Friday.

The sale is part of the bank's strategy to slash costs, unload businesses and retreat from retail banking in markets where it doesn't have scale. The new plan was set out by HSBC Chief Executive Stuart Gulliver in May as the finance giant aims to convince investors the bank can make strong returns in tough regulatory and economic conditions that have dragged on its profit.

France's AXA SA, Germany's Allianz SE, Switzerland's Zurich Financial Services AG, Australia's QBE Insurance Group Ltd. and Japanese insurer MSIG, are among companies that have been approached according to international press reports. One report suggested the business is worth around $1 billion.

HSBC has 100%-owned general insurance manufacturing operations in France, Hong Kong, Singapore, Argentina, Mexico, and Panama. Many of these are part of companies that also manufacture life insurance or have other interests.

An HSBC spokesman declined to comment.

Rural Bank of Kuningan

2011-05-10T12:54:00.000-07:00

Good news for civil servants in the district of Kuningan. The reason, BPR Kuningan is a Regional–Owned Enterprises (enterprises) Regency of Kuningan offers a loan program with low interest rates at 1.25 percentper month.

Director of PD BPR Kuningan, Drs EK Sugiarto accompanied by the Director of Operations, Momon Supriatana SE, said the interest rate of 1.25 percent per month and is intended only for the civil servants. In addition, the program is deliberately initiated a breakthrough for the customers to recruitcivil servants around Kuningan regency in need of funds, as well as a form of PD BPR Kuningan concern as regional and community banks owned by Kuningan Regency.

"Can compare with other banks, PD BPR offers a program (product) the more mild loan interest rates, particularly for the civil servants. Nowadays loanlimits from $ 2 million-USD 100,000. While the boundary installments starting from 2 years to 7 years," said EK Sugirato diamini Momon, the Kuningan News, Tuesday (5/4).

It is said EK Sugiarto, for the civil servants who want to know more information to apply for loans through this program or product, it suggested that immediate contact BPR Kuningan branch office nearest or other cash offices scattered PD BPR Kuningan regency region.

"And please note, PD BPR will provide faster service to customers. Because it has made all our commitments. And keep in mind also, loan products for civil servants with 1.25 percent interest rate is one superior product that is in PD BPR Kuningan," he said.

(BJB) opens new office in Denpasar Bali

2011-03-28T08:10:00.000-07:00

DENPASAR: PT Bank Regional Development of West Java and Banten, PT (BJB) expand to Dewata Island (Bali) and will open a branch office in Denpasar today.

Operations Director BJB Dada A. BJB Suyanto said this year to expand in three major cities in Indonesia. Apart from Denpasar, BJB also will open a branch office in Makassar, South Sulawesi and Balikpapan, East Kalimantan.

"Within this week we will open a branch in Makassar. In addition to branch offices, this year we will open 37 branch offices and an additional ten units of ATMs," said Commercial Director Dadang accompanied BJB Entis Kushendar.

BJB now has 48 branches spread in West Java, Banten, Jakarta, Central Java, East Java, Medan and Batam. With the addition of new branches this year, BJB credit expansion target of 30.6%. Credit expansion is expected to make BJBR achieve LDR of 85.32% at the end of 2011.

According to Dada, Bali has been targeted business expansion since the year 2010. The consideration, in addition to a fairly large market potential in Bali, Bali's economic growth also showed a positive trend. "We're trying to target SMEs and retail segments in Bali. Actually, this year we plan to expand in three more cities, such as Tegal, West Jakarta, and Pekanbaru," said Dada.

BJBR set a target to become the best big ten banks in Indonesia, as well as a regional development bank that is able to penetrate the national market. Until December 2010, BJBR show satisfactory performance. In the period 2010 BJBR recorded an increase in business volume amounted to Rp 43, 445 trillion or an increase of Rp 11, 035 trillion from the 2009 who reached the figure of Rp32, 410 trillion.

Meanwhile, third-party funds (TPF) that have been collected to reach Rp 31, 953 trillion in the period 2010, an increase of Rp 8, 235 trillion from the period of 2010, which listed ANGA Rp23, 719 trillion.

Loans disbursed increased Rp4, 038 trillion from Rp19, 631 trillion in the period 2009, to be Rp23, 669 trillion in the period of 2010. Such financial records, make BJBR into the category of healthy banks, with profits (before taxes) reached USD 1.219 trillion.

Union Bank Funds Back Up: What Premonition?

2009-01-16T22:33:00.000-08:00

IN the last few months, the banking sector does not seem to have separated from the news scene, from the emergence of many regulations, the abundant liquidity, the bank closure, piercing a bank, credit is difficult to be distributed, to the decline in interest rate funds. IN the midst of the news scene is one of the phenomena in the banking industry is also interesting to disimak, again increasing the position of the union of public funds (usually referred to as third-party funds / DPK) in May 2004, after previously always show declining trends.

This is a interesting phenomenon, because the phenomenon occurs even when the banks in the excess liquidity difficulties and provides loans to the real sector. The question is not liquidity, which continues to grow without the placement that will further confuse the bank manager?

Growth DPK this position can also be considered strange because there is no practical increase in interest rates in the banking sector significantly. The interest rate deposits, giro, or savings can be stable. Even if there is increase, it only happens in the banks have capital due to a small increase in interest rate guarantee. Interest rate of Bank Indonesia Certificates (SBI) as the main interest rate in the country is relatively stable after the initial hold down since 2003. During the period April-May 2004, the interest rate one-month SBI measure 7,32-7,34 percent.

Based on the conditions, said banks can not have the benefits of the interest rate that can make investors interested in transferring their funds from bonds, stocks, mutual funds, portfolios or other investments in deposits, giro, or savings. Then what is the position DPK ride?

BASED data Bank Indonesia (BI), DPK per position in May 2004 of Rp 897,815 billion, up 2.6 percent compared with the previous month to Rp 875,281 billion. In December 2003 DPK position to reach the highest level of Rp 902,325 billion, but in the next month might continue to decline.

All types of DPK, such as gyro, savings and time deposits increased indicate trends. The increase occurred in the largest gyro which reached 8.8 percent to Rp 236.9 trillion, compared with the previous month to Rp 217.97 trillion. A savings of Rp 255.11 billion, up 1.3 percent from the previous month to Rp 251.87 trillion. Meanwhile, time deposits are relatively stable, from Rp 405.44 billion in April to Rp 405.72 trillion in May 2004.

Back to the future, the decline in the position of DPK throughout the period December 2003 to April 2004 triggered by the decrease in savings and time deposits. The decline in savings and time deposits itself actually has happened a long time, since the industry began maraknya mutual funds that give lopsided results (yield) is more interesting, which can be at odds with the four percent interest rate deposits. At the time many funds in the deposits to mutual funds transferred by the owner. Banks did not make it, even banking management work with the manager in the investment to market mutual funds.

Savings in time deposits also decreased when the BI start lowering interest rates SBI consistently in each auction. The decline in interest rates triggered a decrease in SBI interest rate guarantee and finally dragged the fall of bank deposit interest rates.

However, in May 2004 DPK decreasing trend stopped. Growth is happening is not significant, only about Rp 22 trillion. Still it shows an interesting phenomenon.

There are a number of factors that can be causes of increase in the position of DPK. Director of the Institute for Development Economics and Finance (Indef) Dradjad H Wibowo said the increase occurred because of the emergence of DPK sentiment increase interest rates in the country, triggered the issue of increasing the interest rate the U.S. Central Bank (The Fed). Since the Fed Governor Alan Greenspan will give a signal the interest rate increase in mid-April 2004 due to inflation pressures, the global market, including in Indonesia, to respond directly. The count, increase in interest rates The Fed certainly will hoist interest rates also other countries to keep the lopsided results in the country are still interesting. If not compensated, in a way such as investors feared it would give the funds to foreign countries to be placed in U.S. dollars. In fact, response rates increase the likelihood the Fed going quickly in Indonesia. The rupiah weakened directly.

In addition to exchange funds to the U.S. dollar, anticipating the increase in interest rates The Fed also made the switch from the investment portfolio to the banking system, such as gyro, savings and time deposits. Investors hope this is the Fed interest rate increase, the interest rate banks also increased so that they can benefit from higher.

The hope is that investors terkabul. In May, BI raised the interest rate guarantee. For example, to guarantee the interest rate period of one month fixed 7.25 percent, up 114 basis points in April compared to 6.11 percent of that. Rise due to interest rate guarantee, a number of banks raising interest rates last time deposits and savings.

In May the average interest rate one-month time deposits of 5.84 percent, up compared to the average in April of that 5.62 percent. Unfortunately, the increase interest rates only deposits banks beraset small. As for the major banks, such as Bank Mandiri, BCA, Bank BNI and BRI, retaining interest rate depositonya. The reason, they are in a condition of excess liquidity as a result of the credit to the real sector is running slow.

In fact, one of the goals of the bank raising interest rates is to absorb liquidity. They also worried that interest rates increase the funds will follow up the interest rate credit. "Why we raise the deposit interest rates if we are still abundant liquidity," said Director of Bank Mandiri ECW Neloe.

Despite raising the interest rate guarantee, BI can still maintain the SBI interest rates remain stable. In fact, throughout the month of May even one month SBI down one basis points to be 7.32 percent compared to the previous month. This is because BI can be done by the condition of the banking tertolong the excess liquidity. Without raising the interest rate SBI, BI has been able to absorb liquidity in accordance target.

However, due to the issue of increasing U.S. interest rates, the trend decline in SBI interest rate was less restrained. SBI interest rate of the previous hold a gradual decrease in the interval of 10 basis points starting with a stable fluctuation under five basis points.

ADITYA Wardhana, Senior Analyst Trimegah Securities explains the position of the increase of funds of third parties is also the role of the mutual fund industry. Along with increased political uncertainty security conditions for elections in 2004 and the issue of increasing interest rates, many investors, mutual funds that choose to place their funds in money market mutual funds are based on time deposits and short-term bonds.

But earlier, investors prefer to infuse funds in fixed income mutual funds are based on government bonds. By selecting the money market mutual funds, investors expect their investments more secure and more liquid.

He also said, after growing fenomenal in the last two years, the growth of mutual funds now have slowed, and even can be spelled saturated. Mutual funds is estimated to grow more difficult as more supply emisinya, such as bonds, more limited. This is what makes the funds back into banks. Until 5 August 2004 the management of mutual funds of funds reached Rp 90.2 trillion, with the composition of fixed income mutual funds Rp 75.1 trillion, Rp 783 billion in stock, a mixture of Rp 2.18 trillion, money market and Rp 12.17 trillion.

Ditambahkannya, improving the position of DPK is also a domino effect of the inclusion of all interest income portfolio investment, such as bonds into the banking system.

The same phenomenon also applies to the insurance industry. Vice President Director of PT Panin Life Tri Djoko Santoso, said the emergence of the interest rate rise expectations and SBI deposits due to increased interest rates so that the U.S. Central Bank began to re-create a place of insurance funds to invest deposits and SBI.

Conditions at the same time that the trend of the insurance investment portfolio of bonds and deposits to mutual funds, which continues to progress in the last few years, since the deposit interest rates continue to decrease. At the end of 2003 the composition of portfolio insurance industry is a major corporate bond of Rp 6.26 trillion, the state bond of Rp 5.73 trillion, and time deposits of Rp 4.53 trillion.

"In recent months, since legislative elections take place, the insurance industry began to switch back to the money market investment, such as deposits and SBI, as it is considered more secure and likuiditasnya high. This is also reflection of wait and see attitude until the election ended and a new form of government, "he said.

Ryan Kiryanto banking observers say, the increase position DPK also triggered by political uncertainty and security situation during the election of the President. "In the current situation, investors tend to seek investment portfolio in a safe and liquid, such as deposits," said Ryan.

Bank Niaga President Director Peter B Stock, said the increase occurred because the position DPK banks increasingly creative product launches, especially savings and giro. This is reflected in the growth of both the higher rather than time deposits. Bank savings products more menggenjot and gyro because both types of funds including the cheap, in the sense that interest should be paid to the customer is lower than the deposit. With the portion of the funds that the more affordable, bank net interest income will increase.

He also said, although banks are generally still excess liquidity, the bank is still working to collect funds as much as possible. Although not as dikucurkan credit, the bank still has the ability to invest these funds so that it can still generate profits.

According to the Director BRI Rudjito, the increase is DPK position is determined by the interest rate time deposits and other savings. If the bank increased interest rates, investors will certainly switch to the bank and vice versa. He also said his side did not make DPK increased. Because, other than in the form of loans, the excess liquidity could also be channeled to the SBI, BI Savings Facility (Fasbi), or bonds.

Nevertheless, Ryan predict trends DPK only temporary improvement. After the presidential election and after the Fed interest rate increase, investors will withdraw some funds from banks to ditanamkan on other investment instruments more attractive.

Healty Banking National Agency

2009-01-12T22:58:00.000-08:00

This year, the national banks to enter the high growth. This year is the property of the banking sector. So, do not have to wonder if emiten banking stocks led the movement in capital markets. Organizing elections was slightly hamper lending rate in the first quarter, but fundamentally strong result looked great optimism banking.

MASA banking consolidation can be said to have been completed years ago. Dispersal Healty Banking National Agency (IBRA) and the divestment of Bank Permata has become the end of a period.

All the bank was under IBRA has completed the restructuring program, particularly the restructuring of problem loans (NPL). Consolidation of others, namely the consolidation of accounting, as well as kuasi reorganization has also been completed. Kuasi reorganization accounting procedures are defined and approved the company's shareholders to remove the negative balance with the lower profit in the account balance (post) paid-up capital (capital paid). In this process, the assets were too high must also be revealed.
Kuasi the completion of this reorganization to create the position of the bank changed at all. From the financial big negative, be positive. Be like a baby that was born again. View course, the fundamental position of the national bank capital is very high, reaching Rp 120 trillion. Take the Rp 20 trillion in June from the previous year that Rp 100 trillion. Or has bounced away from the capital position of the crisis in 1999 that the negative Rp 21 trillion.

Until 2003, the bank can be said by the consolidation busy, doing a variety of operational efficiency of the problem, the network, branch offices, and the efficiency of the capital cost to remove the burden. The most obvious source of funds are shifting funds from the expensive form of deposits to fund cheaper form of savings and giro.

In June 2003 the position of time deposits is still 52 percent of the total funds of third parties, and continue to go down so that in December 2003 to be 48 percent. Currently, the total time deposits Rp 405 trillion, or 45 percent of the total funds of the third party Rp 897 trillion. Thus, 55 percent of third-party funds of funds have shaped the form of cheap savings and giro. Even the structure of the funding is better than before the crisis, in which the portion of deposits above 50 percent can even reach 54 percent of the funds of third parties.

Another factor that makes the bank feel strong bonds the government is banking on that to reach Rp 321 trillion. On the one hand, there are many government bonds finished criticized because it shows the function is still weak intermediasi bank. But, on the other hand government bonds is enough to support the performance of banks.

With the number of government bonds, the bankers into the position of civil servants kayak course, get a fixed salary. Although not ideal, it helps the bank's income, and cash flow when the real sector is not ready to absorb the credit.

Fourth, the success of BI maintain very low interest rates to provide benefits to the two banks. First interest burden declined sharply, from June to year ago in June this year down 35-40 percent. Apart from the decline in credit interest rates, the decline in interest burden of this shift is also obtained from a source of funding expensive form of cheap deposits to savings and giro.

From various indicators show that the recovery performance of banks, which is still different from the situation before the crisis is only a matter of capital adequacy ratio (CAR) and the ratio of credit than a third-party funds (loan deposit ratio / LDR). The main difference is related to the assets that banks are still largely shaped government bonds. So, huge receivables that are not in the form of credit, but the form of government bonds which can not be given a risk weight. So, not too surprising if the high-CAR, LDR low.

Expansion
With the completion of consolidation, banks are no longer only look busy internal improvements. Bankers can start thinking about the focus on how to grow. How can such kind of credit expansion, mergers and acquisitions, or form strategic alliances.

Signs of high growth phase can be seen on semaraknya mergers, acquisitions and various other steps. A course acquisition Central Sari Finance (CSF) by the Bank Central Asia, Adira Dinamika Multi Finance Bank Danamon, the entrance of the Singapore OCBC Bank to buy 22.5 percent of shares of Bank NISP, Bank Buana Bank menggandeng other origin Singapore, UOB, with the release 23 percent shares with a value of Rp 602 billion.

Foreshadow the light is so many local banks that follow the tender divestment of Bank Permata. It is not strange that in the future if the banks will be busy milang-miling, financial companies which want to buy, whether it is among banks, finance companies, securities companies, or insurance.

Acquisition of other banks are clearly the implications for the ability to increase the bank. The acquisition of the company's financing will help push up credit. Acquisitions or strategic alliances with the securities or insurance company will help the ability of the bank so that funds will not be a customer to run everywhere. Example, from the entrance to the salary savings, in part to pay for insurance, some other investment in mutual funds, they all have one in the same bank. Not if there is potential for large institutional customers who want to do actions in the exchange is that bonds issued or issuing shares.

Intermediation Function
Even if the LDR has not been back to the period before the crisis, but the national banking intermediasi gradually continue to show improvement. Credit growth, especially in the micro business sector small and medium (UMKM) and the consumer.

The position of bank loans in June this year increased by Rp 15.3 trillion to Rp 528.7 trillion. Even in the first quarter this year's credit was sluggish, growing only Rp 6.8 trillion. But the condition is improved in the second quarter. In June 2004 alone, the new credit dikucurkan reach Rp 11.8 where 44.4 percent of which are channeled to micro small medium (UMKM). The cumulative, until June 2004, total new bank loans reached Rp 31.9 trillion.

The increase in the credit side, among others, due to third party funds (DPK) of Rp 17.7 trillion, or about 2 percent of the total Rp 897 DPK trillion.

On the demand side, the increase is driven by credit relatively low level of bank credit tribe. However, in June 2004 there are additional undisburse loan, loans approved but not yet disbursed, that is, the Rp 1.7 trillion. Overall, loans approved but not disbursed in the middle of this year of 2004 reached Rp 127.6 trillion.

The high number of loans approved by banks, but not yet drawn, and show how the real sector still faces many obstacles, so that only a little space. No wonder that the largest portion of credit loans for consumption, while most low-investment credit. As of May 2004, of the total new credit Rp 24.4 trillion, the new investment credit Rp 5.1 trillion, or 20.1 percent, credit consumption Rp 7.8 trillion or 32 percent, working capital loans and Rp 11.5 trillion or 47 percent.

From the quality of loans, in June it was increasing the quality of the visible decline in the NPL ratio of the gross and net respectively decline to be 7.6 percent and 2.4 percent. Aspects of the banking capital industry is still adequate, which is recorded at 20.9 percent. However, the influence of factors should be the size of the assets forming bonds to the CAR government and the LDR.

Constraints
Exposure does not mean that all mulus only. This year, the bank also cut a number of obstacles that potential growth. That, among other constraints, the price of crude oil continues to soar, economic growth in other countries is down, the interest rate increase in the U.S. Central Bank (The Fed).

Crude oil prices high enough worrying, because it will disrupt the ability of customers to pay debts. Oil prices rose sharply that it will make the costs rise sharply so that the flow of incoming cash into a reduced ability to automatically reduce the customer. Indirectly, the increase of high oil prices will also undermine macroeconomic growth, both in relation to the increase in the burden of the national budget and the cost should be borne by the real sector. In general, if this condition will continue to make banking customers delayed.

Oil prices are also affecting the rupiah, which continues to wane, this weekend at the top of the Rp 9,200 per U.S. dollar. Weakening of rupiah exchange rate have the impact that berkebalikan for a different business sectors. For the business sector income of U.S. dollar and rupiah berbiaya, it will be profitable. Meanwhile, income for the rupiah, and have a lot of cost or debt in U.S. dollars that will be very detrimental. However, the general weakening rupiah this can be harmful, if we have a period of decline the position of the exchange rate before the financial crisis. For banks, the sharp weakening rupiah this increase the risk of foreign currency loans.

The challenge is that the interest rate increase in the Fed funds directly affect the cost (cost of fund) because BI is square off raising interest rates by Bank Indonesia Certificates (SBI). In addition, the length of the election, held for about seven months, also make the business be more careful. Bankers, of course, also much more careful in distributing the credit. Not surprisingly, if the Board of Directors of Bank NISP several states last week will be more conservative. This attitude arises from concerns will increase the NPL usually increase the interest rate credit. Logical course, if the increase in SBI interest rate is quite high while inflation is also higher than the estimated 6-7 percent, then it will make the bank no longer has spread, the difference between the interest rate and credit SBI adequate. As a result, the bank would not want to have to raise interest rates to keep credit depletion that the interest rate difference is still in the limit of tolerance.

Increased interest rate credit is of course means increased costs for debitor aka pressure to ability to pay debts. Therefore, interest rates usually increase the credit will be followed by increase in NPL.

If you see the obstacles, the bank has the option increase the interest rate or credit brake credit growth to anticipate the increase in NPL. However, it can also happen that both of them, raising the interest rate brake credit growth at a time credit.

The decline in economic growth in countries that triggered the policy pelambatan China's economic growth will affect the performance of the banking debitor engaged in export business. Down the request will make the exporter must reduce production. This is clearly an obstacle to the expansion of the loan, so the growth is quite high terpangkas.

Therefore, the performance of the banking sector more extraordinary new look will be in 2005, when the obstacles that have been terantisipasi, from the political certainty is elected president of the new cabinet, and the influence of the external soften.

API
In addition to the already entered the phase of growth, the expansive variety of banking this year is also a part of their efforts to meet the demand structure of the Indonesian Banking Architecture (API). Attendance API indeed greeted warmly by various parties.

Departure from the miserable conditions pascakrisis, the API is expected to give clear direction to the front. Number of commercial banks since the monetary crisis reduced ago over 100 banks. Currently, the number 130 to stay in the bank where 60 percent of them small bank with assets Rp 1 trillion to the bottom. From the side or financial assets, 15 banks control more than 80 percent of the banking industry.

According to the Kompas notes, analysts and observers of the banking sector generally assess the API is still too general. Capital markets analyst Fendi Susiyanto rate, API are necessary so that more concrete. Dradjad Wibowo observer banking supervision in the rate of the API is still bias, despite already provide a large share of control in accordance with the recommendations of Basel Committee on Banking supervision (Basel Committee). Supervision is dielaborasi with depth, both in the form of minimum capital requirements, process control, certification for risk managers, improving governance of both companies, the establishment of credit bureaus, as well as consumer complaints and the establishment of a banking institution independent mediation. Meanwhile, capital markets analyst Lin Che Wei rate less API shows a strong desire from the BI, because the actual structure of the desired natural be achieved by itself during the time period specified, that is 10 years old to 15 years. Of course, with the assumption that the items did not change, the dividend discount and large-scale should not be done.

Fendi rate, the API is a framework which is very rough. Consumer protection, such as what will be, and how banks should be, like what order its implementation.

Attention to the main banking API seems still focus on the capital structure. Simple logic is the capital of the bank, the bank increased the ability to manage risk, develop information technology, and scale to support the capacity growth kredit.Namun, does not always run so. Do not forget, the big capital does not mean everything. During the crisis when the banks have capital of Indian, banks plecit, classmates bank BPRs more or less, thus survive.

Capital of the greater ability to create assets and the bank increased. However, the emphasis on attention to capital structure that is too big not to encourage banks to mergers carelessly. If it does not result in synergies, the merger would bring the value of companies decline. Or one does not add one to be let alone three to four as a result of synergies from a merger, but one plus one would be less than two.

Ideally indeed, a merger occurs naturally. Nevertheless, Fendi holds, will be good if BI made a clear map for the banks, about options that can generate merger synergies best. Both the map of human resources, information technology, the structure of credit, and savings, and customer groups.

The establishment of a healthy banking structure is a challenge for the establishment of the first API, given the structure of banking that has not optimal.Sebanyak 75 percent of the national capital banks still concentrated only to the 11 Indonesian banks. Meanwhile, compared with other countries, government ownership of banks in Indonesia is still high. In fact, the highest in Asia.

This is to be withdrawn because the problems of conflict of interest that would disrupt the efficiency of the market. Owned a nest of corruption, collusion and nepotism (KKN) and the dairy cow is not a story of new politicians. In fact, specific to the banking stories have always repeated. Every time before the election, it always happens where piercing bank pembobol work with people inside.

Privatization, the transfer of programs from government ownership to private local and foreign companies are expected to bring in the management of a more healthy, efficient and transparent. Entry of foreign investors to buy banks in Indonesia, was digantungi great hope there will be transfer of knowledge, skills, technology, banking and management better.

However, notable critically, when the performance of banks that have been owned by foreigners is not different from the bank owned by local investors. Foreign banks are also the same can not afford to make credit more quickly from a local bank, and still are more like nikmatnya government bonds.

In fact, do not expect capital growth and better performance if they also ask for very high dividend payments. There is no difference with the state-owned Bank. See it, ask the owner of Bank Danamon dividend payment 40 percent, while the BCA ask higher dividend payments, 58 percent of net profit.

It should be recognized, from the aspects of banking which include institutional, financial, human resources, information technology, implementation of good governance (good corporate governance / GCG), and the banking business ethics, since the condition of fundamental banking restructuring program is still far from adequate. This is because there are still cases of the strike.

Basel II: Encouragement Function Bank Intermediation

2009-01-09T22:48:00.000-08:00

The implementation of Basel II program on the national bank gradually starting in 2008 believed to be able to increase the flow of bank credit to the real sector. This was in line with the level of efficiency membaiknya banking. Chairman of the Center for Study of Law and Development (PSHP) Ade Komaruddin said, the implementation of Basel II will not prevent credit. The Basel II is an increase in risk management so that future tecermin business efficiency in a bank.

"If banks have good risk management, there would not be a concern to make a financial business, either directly or through credit financing indirectly with many other innovations in banking products," said Ade in Jakarta, yesterday.

He menuturkan, improving function intermediasi will happen because in the implementation of Basel II, the supervisory authority has the authority to set something in accordance with the characteristics of the banking system in each jurisdiction. According to Ade, many national banks in the wrong kaprah understand the implementation of Basel II because Basel II does not look as a company asset.

"The banks we still see the implementation of the Basel more as a cost. From where regulators will actually distort the understanding that he is actually the implementation of Basel is not free central bank (regulators), but (to) the interests of banks, "he added.

Meanwhile, business circles believe Badan Usaha Milik Negara (BUMN) can be used to encourage the movement of the real sector. Peru-red plate sahaan that are expected to stimulate the real sector is state-owned banking, manufacturing, and plantations.

In a survey conducted by Professional Civil Society (MPM) for the 200 respondents from the middle circle in Jakarta, Bogor, Depok, Tangerang, Bekasi (Jabodetabek) found that the results of 50% of respondents felt confident BUMN can encourage the real sector.

Ratings UMKM and the Basel II

2009-01-06T22:35:00.000-08:00

Director of Research and Settings Banking Bank Indonesia, Muliaman D. Hadad said the mechanism should have a rating system can encourage a cheaper but still credible for micro small medium (UMKM) in relation to the implementation of Basel II Accord will be banking on the 2008. WORKERS connect leather shoes in the center of one of the shoe industry Cibaduyut Bandung, some time ago. To improve access to finance for small businesses small medium (UMKM), the rating system needs to cheaper but still credible .* HARRY SURJANA / "PR"

"This is important because the target is seen in the implementation of Basel II, how to work to improve access to financial UMKM (as customers) on the funding source (bank)," he said on the sidelines of Basel II seminar and Financial Stability: Preconditions and Implementation Challenges ", in Denpasar, Bali , last week. He has developed during the implementation of this rating in terms of risk management but in terms of UMKM must be extracted again.

But that should be thought, he said how the rating is not even cause a new problem. "For that we need to think about ways that are not burdensome UMKM rating is at a time until the bank has information which is greater," he said.

Examplizeed rating the UMKM in India. He has been held in India is relatively low rating. "I will search the information for rating UMKM in Indonesia. The rating can be a solution to the constraints of UMKM lack access to banking. And indeed, continue in the context of risk management rating is very good help for banks, customers and communities," said Muliaman.

Baradita Katoppo, President Director, Country Head Indonesia (Rating Agency) ward members for the high rating of UMKM. He is quite difficult to ascertain the exact number but that will be lower than the rating of a bond that could reach Rp 100 million. "If this can be one rating per sepuluhnya, especially when working on a package (order) some of UMKM at the same time, costs can be low again," he said.

Certification officer
On the other Vice President, Senior Economist, Ryan said Kiryanto on the implementation of Basel II, there are some obstacles for small banks that have capital below Rp 100 billion, especially from the aspect of financing, both to improve the human resources sertified or any of the information technology .

For smaller banks, such as BPD, for example to include servants get certification in Jakarta is seen expensive.

"Provider is a banker does not distinguish whether they came from small banks, medium or large generalized all. Therefore, there is a need to break new easier meringakan and small banks," said Ryan.

My suggestion, he said to reduce costs, for employees who are certified must reduce knowledge to other employees, do not need to Jakarta for the new at the time wanted to test the new Jakarta. Imagine the cost for some people HR BPD from Papua for example, if need to Jakarta to learn. "It can also invite one of the tutors from the people to send tens of Jakarta ongkosnya far more expensive," he said.

Portrait of Blur Indonesian Banking Industry

2009-01-02T22:02:00.000-08:00

Almost no new topics of interest are presented, the banking industry. That there still remains a heap for the sluggishness sluggishness. No more Gebyar-Gebyar dedication banks such as the new decade early 1990s. In fact there is a series of bank closure, and it is still will continue to be made. No longer is the least used light sheen of television camera lights early decades the 1990s, often highlight the banking seremoni get foreign loans. So do not wonder if those who work in banks do not feel proud as a banker. Moreover, now is also difficult to get a banker PD (confident) speak concerning the banking industry.

Whether the news is how the Chief of General Perbanas, Gunarni Soeworo. Mother who is also Director of the Bank of Commerce, the rarely seen highlighted television, including interviews with the press.

If you conclude there is no transparency concerning the banking industry, so it will not have a banker who dare to reject it.

That is the picture at a glance, the bank is sick, and reluctant to appear embarrassed like daughter in the media.

Furthermore, there are owners who want to leave the bank far bad memories concerning banks, which provide benefits but not even the owner's financial undermine the bank. But what power, the bank also did not find investors to buy the bank.

Why?

There is also a new story, that the credit problems that tertumpuk property sector also has not been until now to recover. Many new homes without the empty hold. There is also a framework of an apartment building that is now already blemished.

That is one extreme example banking customers, who drown funds saved. An example other banking customers, from 100 can be only 10 customers who are still able to pay for credit.

***

AFTER restructuring in two years, indicators bank also does not look better. To see it, usually the beam is a capital (capital), assets, management, and loans.

From the capital, only clearly positive because it injected the government (see table on the bank rekapitalisasi groups and banks owned by the government or persero get a capital injection).

Exception occurred in the foreign banks and private banks such as Bank Panin, NISP, Bank Buana, and Bank Mega, which is able to maintain the strength of their own capital.

Capital as important preparation for the potential in case of bad debts.

The second is the assets. The views are of course the quality of their assets. To that can be monitored at a glance, in terms of the comparison between the credit problems (non-performing loan) to total loans.

There are very few banks that have credit problems percentage below 10 percent, that is, the BCA 4.2 percent, 8.6 percent of Bank Danamon, Bank Bukopin 1.6 percent, 5 percent of BRI.

But do not forget, along with the three banks in the bank also funded other banks are government-fed Penyehatan Banking National Agency (IBRA) to take no credit tertagih.

Other banks also lower the percentage of credit is bermasalahnya NISP, Bank Buana, and Bank Mega. However, Bank Mega is now suspected to be, whether he can maintain the quality of bank credit because the incentive to do this very expansion branches and loans, which are a source of falling national banks. It is unclear whether the Bank can keep Mega-buoy buoy health.

It is surprising that the credit quality of foreign banks. No one under 10 percent. Of their branches in Indonesia are also affected by the economic crisis that aggravate credit quality.

But why the percentage of NPL its relatively high, not because they do not use the criteria of national banks to Categorize credit problems. Foreign banks to use criteria in their home country in the extra strict criteria to give credit problems, so has the percentage of NPL, which is relatively high.

Other indicators are a matter of the composition of management. The story, the only BI know that. Komisarisnya Similarly, if there is a bandit-bandit survive (especially in banks and government banks rekapitalisasi), the only BI also know that. Exception may occur with the Universal Bank, the bank is used as an example of a bank that has good corporate governance, among the banks in the fund.

Things that can be, especially for banks and foreign bank category "A" have-CAR above four percent and no capital injected by the government-guaranteed kejujurannya better management.

Among the banks that are NISP, in which there are elements of the supervision of a World Bank affiliate, the International Finance Corporation (IFC). Bank Buana, and foreign banks is also another example of a matter of good management and the composition of its commissioners.

To Panin Bank and Bank Mega, better if BI provide an assessment.

Other indicators to assess the bank is, if banks function as institutions intermediasi. That is, if they absorb funds and channeled it to the business world.

If limitations are LDR above 50 percent, only BII, Bank Universal, Bank Bukopin, NISP, Mega, BRI, and foreign banks that can be classified as still able to perform its role as a intermediasi.

To assess the banks healthy, the weight given above, and then given the healthy category, not to healthy.

Not all banks are classified on the healthy, but there are a few that healthy. See for example, Bank NISP, always dominated the ratings as a healthy bank of BI.

The uniqueness of going to the BCA, which according to IBRA, the bank indicated as strong. Similarly, Bank Danamon, the second largest bank in terms of assets in IBRA, is now placing more funds in Bank Indonesia certificates (SBI), along with other banks.

***

No details can be concluded, but from the description above, at a glance, envisaged only a few banks that basically strong views from various aspects.

However, internal error banking units are also not merely negligence banking. Macro-economic climate and socio-political factors also disturb the economy, which makes the bank to the brink skid destruction.

Accordingly, the banking analyst, Mirza Adityaswara, provide information. "One of the analysts are making the task of" marketing trip "to meet fund managers with the aim to give their views on Indonesia in six months. To do this analyst must have the strong view what would happen.

Of course, Mirza said, most of these fund managers do not want to invest in Indonesia. However, interesting that of the 16 fund managers that we met (in their own), most of the two states.

Indonesian a strong man, and it requires currency stabilization plan (export repatriation / currency board / fixed rate / currency control, or whatever his name).

This means that they now realize that the new problem is complex, it's going to change the market perception of what is required of Indonesia. Previously, the things that are taboo for the fund managers to recommend a currency stabilization plan.

Certainly, the reform in Indonesia should continue to be carried out and to prevent it, like do not like, India still need pressure from outside (either under the IMF, World Bank, or the other). Malaysia currently avoided by investors because they are not applying capital control, but because Malaysia does not make economic and political reform.

Unfortunately, many friends economists are still not aware of changes in market perceptions. I once worried about the situation in the years 2003-2004 in which at that time began Recap bonds mature. To me, Indonesia (Cabinet and future) need three things at once.

That is a political solution, continuation of reform, and currency stabilization plan. Short but solid. That is the message Mirza, to save the integrity of the state social-political, economic, state, and become pillars of the next macro healthful and rescue banks.