Improving Banking Supervisory Mechanisms
In the OIC Member Countries
96
Figure 64: Risk-Weighted Asset Decomposition, Indonesia
Source: Bankscope
Majority of Indonesian's Risk Weights stems from credit risk due to higher fraction loans in
total assets. Operational risk weights are also high indicating a relatively high banking profit
over the last couple of years. Slightly different characteristic of Indonesian banking system
originates from its trading profit where almost 10% of total profits made by this banking
system comes from trading.
Figure 65: Profitability of the Banking Sector, Indonesia
Source: Bankscope
Risk
Weig.
Ass.
-
Credit
Risk
85%
Risk Weig. Ass.
- Market Risk
4%
Risk Weig. Ass.
- Op. Market Risk
11%
Risk-Weighted Asset Decomposition
Net Interest
Income
58%
Net Gains on
Trad. and Der.
9%
Non-Interest
Operating
Income
33%
Profitability of the Banking Sector