Fitch: Indonesian banks unaffected by tsunami

Fitch Ratings said that while the tsunami that struck the northern Sumatra region of Indonesia wreaked devastation on certain sections of the society, its financial impact for Indonesian banks is expected to be limited. As a result, Fitch's current ratings on Indonesian banks are unlikely to be affected.

While the social grief from lives lost and communities displaced in Indonesia by the disaster is immeasurable, for the banking sector as a whole, Fitch said the financial impact is unlikely to be significant.

Fitch said central bank data shows that loans to Aceh province amounted to IDR3.9 trillion, i.e. just $422 million or 0.7% of total system-wide loans as at end-October 2004.

The modest sum reflects the remoteness of the area affected, as well the banks' historical avoidance of the region owing to fighting there between separatists and the government, according to Fitch.

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