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Financial Services Report Indonesia 3rd Quarter

  • ID: 2196314
  • Report
  • September 2016
  • Region: Indonesia
  • 25 Pages
  • The Economist Intelligence Unit
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Indonesia has a relatively small financial sector, but The Economist Intelligence Unit expects it to expand rapidly in response to strong economic growth. Financial services, including insurance, accounted for 4% of GDP in 2015, according to Statistics Indonesia (BPS). The broader industry of finance, insurance and real estate accounted for 2.8% of total employment in that year.

We expect banks to expand both at home and abroad in 2016-20. The government has a large presence in the banking sector-a legacy of the bail-outs and takeovers required in the wake of the 1997-98 Asian financial crisis. Efforts to return banks to private ownership will proceed only slowly.

Tighter restrictions on the ownership of local lenders were imposed in 2012 by Bank Indonesia (BI, the central bank). Since then, ownership of a local lender by a single non-bank shareholder (local or foreign) has been limited to 40%. Shareholdings owned by banks (as opposed to non-banks) may exceed 40%, subject to approval from the Financial Services Authority (OJK), which took over from BI as the banking regulator in December 2013. However, a lengthy waiting period applies-a minimum of five years from the date of approval. At present, the criteria for securing approval for higher shareholdings are unclear, and political considerations appear to enter into decision-making.

Industry List: Asset management, Financial Services, Banking, Financial Services, Financial markets and instruments, Financial Services, Financial regulation, Financial Services, Financial Services, Financial Services, Insurance
Industry Codes (NAIC): 52
Industry Codes (SIC): 60
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Financial Services Report Indonesia 3rd Quarter

Financial services report



Asset managers

Financial markets and instruments

Financial regulation
Regulatory watchlist

Monetary and currency policy: Monetary policy

Monetary and currency policy: Exchange rates

Indonesia at a glance

Fundamental indicators

Key contacts
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Note: Product cover images may vary from those shown