Setelah kepemilikan saham bank untuk para investor asing dibatasi maksimal 40% selama tiga tahun terakhir, para investor asing kini diizinkan untuk mengontrol lebih dari 40% saham di bank-bank Indonesia apabila mereka membeli dua bank lokal dan memerger-nya menjadi satu. Para pemegang otoritas keuangan di Indonesia memberikan lampu hijau untuk dua bank asing (China Construction Bank Corporation dan Shinhan Bank dari Korea Selatan) yang ingin memasuki sektor perbankan Indonesia yang menguntungkan.

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In a new report US-based rating agency Moody's Investors Service says that Indonesian banks are strong enough to cope with ongoing currency volatility and sluggish economic growth. Although sharp rupiah depreciation does imply risks, "Indonesian banks seem manageable", Moody's Vice President and Senior Credit Officer Srikanth Vadlamani said, "as over 70 percent of local banks' debt constitutes related-party debt, implying minimal risks to the domestic banking system".

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Global credit rating agency Fitch Ratings expects slowing credit growth in Indonesia to reduce systemic risks in the country’s banking sector. In a report entitled Macro-Prudential Risk Monitor, which was released on 3 March 2015, it was mentioned that the macro-prudential risk indicator (MPI) for Indonesia was lowered from '3' (high risk) to '2' (moderate risk). Primary reason for this risk cut was the slowdown in the country's real credit expansion to below 5 percent in 2014 (from a peak of almost 20 percent in 2011).

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Komisi XI DPR yang membidangi sektor perbankan nasional akan segera mengusulkan rancangan baru undang-undang yang membatasi kepemilikan asing di bank-bank Indonesia menjadi 40 persen (dari 99 persen saat ini). Bank yang sekarang dimiliki oleh pihak asing akan diberi waktu 10 tahun mendivestasikan sahamnya setelah rancangan undang-undang diloloskan menjadi undang-undang (konon rancangan sebelumnya memberikan jangka waktu pengalihan selama lima tahun untuk divestasi wajib tersebut).

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Executive director of equity research at JP Morgan Securities Indonesia Aditya Srinath painted a positive picture about the equity market in Indonesia despite the lingering risks emerging from domestic political instability and looming capital outflows due to higher US interest rates in the second quarter of 2015. Srinath stated that Indonesia’s economic resilience so far as well as falling domestic interest rates among Indonesian financial institutions are positive signs for the equity market.

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J Trust, a Japan-based company engaged in the finance, real estate, IT system, as well as amusement sectors, is reportedly buying Indonesia’s Bank Mutiara (formerly known as Bank Century). Bank Century made headlines due to a controversial government bail-out in 2008 amid the economic crisis when the bank was said to be on the brink of collapse (the impact of which would spread to other local banks). Bank Century then obtained a capital injection of IDR 6.7 trillion (USD $573 million) from the country's Deposit Insurance Agency (LPS).

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According to data from the Financial Services Authority (OJK), foreign banks operating in Indonesia have posted great profit growth in the January to May 2014 period. Combined, these foreign banks have recorded a 94.36 percentage point growth (year-on-year) in profit to IDR 3.79 trillion (USD $323.9 million) in the first five months of this year. The reason behind this jump in profit is the sharply depreciated rupiah exchange rate. Over the course of 2013, the rupiah fell over 25 percent against the US dollar.

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As companies' corporate earnings reports covering the first quarter of 2014 have been released since the last couple of weeks, it is interesting to take a quick look at the top ten most profitable Indonesian state-owned companies (SOE) that are listed on the Indonesia Stock Exchange (IDX). The ten companies are ranked on highest net profit in Q1-2014 in the table below. It is interesting to note that four of these companies are banks, while there are two pairs of cement producers and construction companies.

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On Wednesday (15/01), the first new listing of 2014 on the Indonesia Stock Exchange was conducted. Bank Panin Syariah, provider of Islamic banking services and subsidiary of Bank Panin, became a listed company (with listed company code PNBS). Through the initial public offering (IPO), the financial institution is looking for additional capital to meet the central bank's requirement to become a BUKU 2 type of bank (see explanation below). The company aims to reap IDR 475 billion (USD $39.6 million) through the release of 4.75 billion shares.

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Despite Indonesia's macroeconomic conditions and liquidity experiencing a correction, Fitch Ratings believes that Indonesia's major banks are able to withstand a reasonably high degree of asset-quality stress, mainly due to the banks' strong standalone loss absorption cushions and likely support from highly rated foreign parent companies. Because of the banks' sound earnings buffers, they are expected to cope with the higher non-performing loans (NPLs) which are expected to emerge in the next one or two years ahead.

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If you move to Indonesia for a longer period – either for work or just for living – you will most likely want (or need) to open a bank account at a local bank (or a foreign bank that has a branch in Indonesia). After all, if you continue to use a foreign bank account, then it will involve relatively high bank charges each time you withdraw money from the automated teller machine (ATM) in Indonesia, or when you conduct an international transaction (online banking).

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Both Moody's Investors Service and the International Monetary Fund (IMF) released positive reports on Indonesia's banking sector. While Moody's changed its outlook on Indonesia's banking sector from stable to positive, the IMF said Indonesia's banking system is strong enough to cope with relatively slow economic growth and a rise in bad loans.

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Indonesian listed financial institution Bank Tabungan Negara should benefit from the government's Housing Loan Liquidity Facility (in Indonesian: Fasilitas Likuiditas Pembiayaan Perumahan, or FLPP), a government-subsidized mortgage program for those low-income citizens who have never bought a house before. This scheme should boost House Ownership Credit (Kredit Pemilikan Rumah, or KPR) in Southeast Asia's largest economy. Good news for Bank Tabungan Negara, which is the market leader in Indonesia's mortgage loans sector.

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New York-based financial services firm Standard & Poor's stated that Indonesia's banking industry will feel the negative impact of Indonesia's sluggish economic growth in combination with persistently low commodity prices next year. This combination may weaken profitability of the nation's banking industry. S&P puts Indonesia's economic growth in 2016 at 5 percent (y/y), below the International Monetary Fund's and World Bank's forecast as well as the central government's target, all at 5.3 percent (y/y).

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Bank Central Asia (BCA), one of the leading commercial banks in Indonesia, is estimated to continue posting growing net profit and rising credit growth in the years ahead despite the persistently sluggish domestic economy. However, contrary to the state-controlled banks - such as Bank Mandiri, Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI) - BCA will most likely not see double-digit credit growth in the near future as BCA's customers mostly originate from the private sector. The state-controlled banks, on the other hand, have the advantage of being involved in the government's push for infrastructure development and government spending.

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Indonesia’s Financial Services Authority (OJK) issued a new regulation that simplifies the opening of a foreign currency bank account by a foreign national (expat). A circular, S-246/S.01/2015 (dated 15 September 2015 and signed by OJK Chairman Muliaman D. Hadad), has been sent to all directors of Indonesian commercial banks that conduct business in foreign currencies. This new rule, part of the economic policy package that was released by the Indonesian government on 9 September, aims to boost foreign currency funds in Indonesia and support the rupiah.

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Soon it will be easier for foreigners (expats) to have a foreign currency bank account (non-rupiah) in Indonesia. Muliaman D. Hadad, Chairman of the Financial Services Authority (OJK), stated it is bound to issue a new regulation that allows for easier banking in foreign currencies in Indonesia. This regulation is made in an effort to raise the country’s foreign exchange reserves and support the ailing rupiah.

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Regarding stock trading on the Indonesia Stock Exchange, investors who focused on property, banking and infrastructure stocks have made the highest profit so far in 2014. Although all sectoral indices that are contained within the benchmark stock index of Indonesia, known as the Jakarta Composite Index (abbreviated IHSG) have shown a good performance, the three aforementioned sectoral indices stand out as the country's top performers. Indonesia's IHSG has risen 16.14 percent between 1 January and 26 May 2014.

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The banking sector remains a key sector for growth of Indonesia's financial industry as well as the country's general economic expansion as the sector posted the highest profits worldwide. Prasetiantoko Augustine, economist at Bank Tabungan Negara (BTN), said that profitability in Indonesia's banking sector is not only highest in the ASEAN and Southeast Asian region but also worldwide. Bank Rakyat Indonesia posted the highest profit of Indonesian banks in 2013 (IDR 21 trillion), followed by Bank Mandiri (IDR 18 trillion) and BCA (IDR 14 trillion).

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Moody's Investors Service, one of the big three global credit rating firms, predicts that profit in Indonesia's banking sector remains stable due to strong financial fundamentals. In its report "Indonesia Banking System Outlook", which discusses Indonesian banks' creditworthiness over the next 12 to 18 months, Moody's assesses that - despite an economic slowdown having reduced GDP growth to 5.78 percent in 2013 and puts some pressure on asset quality - high profitability and strong capital levels will continue into 2014.

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