JAKARTA. S&P Global Ratings, a global rating agency, revised its ratings for three state-owned banks, PT Bank Mandiri (Persero) Tbk (BMRI), PT Bank Rakyat Indonesia (Persero) Tbk. (BBRI), and PT Bank Negara Indonesia (Persero) Tbk. (BBNI) from "stable" to "negative". The three banks have the same rating of BBB- /Negative/A-3.
In its official statement this week, the downgrade was caused by increased economic risks in the Indonesian banking system due to the coronavirus pandemic (Covid-19), which could weaken the credit profiles of these banks.
"In our view, economic risks for Indonesian banks are increasing because of the COVID-19 pandemic, which affects tourism, transportation, trade, manufacturing, and investment (sectors) in the country," said S&P in its official statement as quoted from kontan.co.id on Wednesday (29/4).
Furthermore, S&P Ratings assesses that banks in Indonesia do not have a significant amount of foreign exchange, which minimizes the direct impact of the rupiah depreciation against US dollar.
However, the risk of exchange rates continues to lurk Indonesian banks, since the banks provide to companies that are highly dependent on foreign funding. (AM/AR)