Moody's: Indonesia banks stable

Moody's Investors Service said it sees a stable outlook for the Indonesian banking system, while various challenges in the operating environment, including the stability of the macroeconomic situation, remain apparent.

Relative to their low ratings, the creditworthiness of Indonesian banks is intact despite the strain of the financial crisis, Moody's said.

The agency said it expects their key performance indicators and capital levels will remain stable, or even strengthen over the next four to six quarters.

Overall, capital levels have held up, Moody's said, and asset quality and credit costs will be contained or continue to improve.

The agency said it rates 10 Indonesian banks with baseline credit assessments from Ba1 to Ba3, foreign-currency deposit ratings at Ba3 and local-currency deposit ratings at Baa3.

The 10 banks look set to repeat their good operating performance for another 12 months, according to the agency's report.

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