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Financials

UPDATE 1-Indonesia loan growth at record low in June, seen bottoming

* Loan growth slowed to 1.49% in June-OJK chief

* Says loan growth slowdown hit bottom in June

* June NPL at 3.11%

* July loan growth seen at around 2.3% (Add comments, July estimate)

JAKARTA, Aug 4 (Reuters) - Indonesia’s loan growth slowed to 1.49% in June as efforts to contain the coronavirus outbreak hit the economy, the chairman of the Financial Services Authority (OJK) said on Tuesday, noting that signs of recovery were seen in July.

The June figure is the lowest monthly rate of growth in lending on record, according to Refinitiv data dating back to December 2002. In comparison, May’s loan growth was 3.04%.

The non-performing loan ratio stood at 3.11% in June, up from 3.01% a month earlier.

“We estimated that June is the bottom,” Wimboh Santoso, told a virtual press briefing, adding that loan distribution in July has picked up pace.

The OJK estimated July loan growth at around 2.3% based on data up to July 23.

“We believe the (loan) expansion in July was supported by cheap funding from the government that was distributed through the state banks,” he said.

Indonesia’s government is placing 30 trillion rupiah ($2.05 billion) in funds to distribute as cheap loans to support the economy. ($1 = 14,600.0000 rupiah) (Reporting by Tabita Diela Writing by Fransiska Nangoy Editing by Ed Davies)

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