Moody’s acts on Indonesian banks

Moody's Investors Service said it affirmed the deposit ratings of nine Indonesian banks, including Bank Rakyat Indonesia, Bank Mandiri, Bank Central Asia Tbk, Bank Negara Indonesia Tbk, Bank Tabungan Negara, PT Bank CIMB Niaga Tbk, Pan Indonesia Bank Tbk, Bank Danamon Indonesia Tbk and Bank Permata Tbk.

The agency also upgraded the baseline credit assessments of Bank Negara Indonesia and Bank Danamon Indonesia to baa3 from ba1, and the baseline credit assessments of Bank Tabungan Negara, CIMB Niaga and Pan Indonesia to ba1 from ba2.

The baseline credit assessments of the other four affected banks were affirmed, including Bank Rakyat Indonesia and Bank Central Asia at baa2, Bank Mandiri at baa3 and Bank Permata at ba2.

The outlooks remain stable.

Moody's said it expects that operating conditions in Indonesia (Baa2 stable) will continue to improve, and that the positive momentum will translate into improved growth prospects and stabilizing asset quality for the banking system.

The agency said it also believes that the banking sector is emerging from the bottom of the credit cycle, as evidenced by the broad-based stabilization in the pace of the formation of new problem assets and the gradual recovery in loan demand.

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