Indonesian companies ask for more loans to buy assets affected by pandemic by Bloomberg

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© Reuters.

(Bloomberg) – Indonesia’s second-largest asset lender says companies in the country should demand more loans as they recoup assets made cheaper by the pandemic.

Some buyers are interested in the assets that became available after the virus and in the measures to curb the Indonesian economy, Alexandra Askandar, director of corporate banking at PT Bank Mandiri, said in an interview last week. Growth in loans to large companies is likely to accelerate in the second half of the year after expanding by 3.4% in the first six months, she said, declining to give a specific target.

“There is a demand for loans that was triggered by this pandemic, as some companies are selling their assets,” according to Askandar, 48. as well as power plants. “

Indonesia’s economy contracted for the first time in more than two decades in the second quarter, but is showing signs of recovery after the government relaxed some traffic restrictions. Still, a number of borrowers, including real estate developer PT Modernland Realty, have missed or delayed debt payments as the pandemic weighs on corporate income.

Out of 320 trillion rupees ($ 22 billion) in loans under Askandar’s supervision, 50 trillion rupees have been restructured, she said. Askandar said she is confident these loans will not turn into non-performing assets after March 2021, when a government-sponsored program to ease debt repayment is about to end, citing improvements in commercial activity.

According to Askandar, the bank will focus again on expanding its business loan portfolio after spending most of the company’s second-quarter debt restructuring. Demand for funds will also come from companies looking to refinance maturing bonds, as market prices are not currently favorable, she said.

© 2020 Bloomberg L.P.

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