Press Release

25.01.2016

2016, A Momentum to Increase the Role of the Private and Financial Sectors in Indonesia

HSBC and Sampoerna University Hold Indonesia Economic and Financial Sector Outlook 2016 Seminar and Initiate A Financial Literacy Programme

Jakarta, 10 December 2015 –  The deteriorating international financial and economic conditions in recent months and the downside risks in the near-term outlook have made macroeconomic management become more challenging. In view of the situation, Sampoerna University and HSBC hold Indonesia Economic and Financial Outlook (IEFSO) 2016, which takes “Turning today's risk into tomorrow's opportunity in times of global volatility” as its theme. Today’s seminar is part of Putera Sampoerna Foundation and HSBC’s partnership to develop a Banking and Financial Education Programme at Sampoerna University through its Faculty of Business, which was launched in October 2015.

"2016 is expected to create a momentum for structural change that will see the private sector play a more significant role in building the foundation for a productive economy and in boosting export by capitalising on rupiah’s depreciation," said Wahyoe Soedarmono, a lecturer at the Faculty of Business, Sampoerna University. "Despite these potentials, there are challenges as the banking sector, which is the primary source for financing private investment, is under pressure, both in terms of credit quality and liquidity," Wahyoe added.

Wahyoe Soedarmono also noted that the amount of private foreign debts had almost doubled the 2010 figure to around US$168 billion in September 2015. As a result, the exchange rate risk due to rupiah depreciation will be greater, particularly with the Fed planning to increase its key rate in the near future. Therefore, deepening the stock market or the domestic bond market for the private sector remains a priority to provide alternative domestic funding sources for the private sector to ease the effects of exchange rate volatility. In addition, efforts to encourage financing intermediation by the banking sector through relaxation of both macro-prudential and micro-prudential rules are still needed as credit expansion by the banking sector will be limited when the Basel III Accord becomes effective in 2016.

Ali Setiawan,  HSBC Indonesia Managing Director, Head of Global Markets, in his presentasion said that, “The recent depreciation of the rupiah againts the US dollar was caused by several structural domestic factors such as export, which is still dominated by commodities whose prices are weakening, exporters’ sentiment resulting from reduced sale of foreign currencies, and rising import of consumer goods. This explains the huge amount of US dollars spent by the private sector to finance import, pay off foreign debts, and pay dividen.” Ali Setiawan also believed that next year, the economy will still be affected by China’s economy that is expected to continue to slow.

Wahyoe Soedarmono added that increasing financial literacy and inclusion is crucial to encourage Indonesians to invest more in long-term investment instruments to help strengthen financing by the banking sector. The current credit slowdown is a result of a slower demand for credit as well as a credit crunch. A higher credit growth will help boost economic recovery in 2016.

The Indonesian government through the Financial Services Authority (OJK) is aggressively improving the financial literacy index of the Indonesian society. This year, the OJK is targeting a two percent (2%) increase in the financial literacy index . In October 2015, Putera Sampoerna Foundation and HSBC launched the financial and banking education programme at the Faculty of Business, Sampoerna University. The programme underlines PSF and HBCS’s commitment to supporting the Government in increasing financial literacy and inclusion in Indonesia.

"Indonesia Economic and Financial Outlook (IEFSO) 2016 is part of the collaboration between HSBC, Putera Sampoerna Foundation and Sampoerna University to develop the Banking and Financial Education Programme," said Dr. Wahdi Salasi April Yudhi, Rector of USBI- Sampoerna University. "This collaboration comprises a curriculum that focuses on the Banking major using unique and bank-specific teaching materials that can be directly applied in the real world and that can produce reliable banking professionals, Training of Trainers (TOT) at more than 210 universities in 7 regions Indonesia, community service activities, seminars and workshops, as well as the economic outlook held by Sampoerna University as a forum to ensure the sustainability of the programme."

Over the course of three years, the programme will cover a range of activities providing real benefits such as training, scholarship, or easy access to bank. Furthermore, HSBC Indonesia employees are also actively involved as volunteers in creating case studies, guest lecturers, members of research teams, and in social projects organised by Sampoerna University or other universities that benefit from this programme.

IEFSO 2016 was also attended by Ganjar Mustika, Ph.D., Senior Advisor of the Financial Services Authority (OJK), Gimin Sumalim, Director of Network and Distribution, Bank Ekonomi, and Zulkifli Zaini, Chairman of of the Indonesian Bankers Association (Ikatan Bankir Indonesia, IBI) as speakers.

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The HSBC Group

HSBC Holdings plc, the parent company of the HSBC Group, is headquartered in London. The Group serves customers worldwide from over 6,100 offices in 72 countries and territories in Asia, Europe, North and Latin America, and the Middle East and North Africa. With assets of US$2,572bn at 30 June 2015, HSBC is one of the world’s largest banking and financial services organizations.

HSBC marks its 150th anniversary in 2015.  As part of this, HSBC has made a US$150m fund available to community projects over three years (2015-2017). More than 140 charities worldwide have been selected by HSBC’s management team, based on votes from HSBC employee for charitable themes. The US$150m fund is in addition to the US$114m HSBC makes available to community investment programme globally each year. Further details: www.hsbc.com/150-community-fund

About Putera Sampoerna Foundation
Putera Sampoerna Foundation is the first social business institution in Indonesia with a vision to create quality future leaders and entrepreneurs in Indonesia, who will face global challenges and are expected to contribute to and make positive changes in their community. Putera Sampoerna Foundation believes that its vision can be achieved through providing quality education for students in Indonesia, creating work fields through entrepreneur development, civil enlightenment through woman empowerment, and humanitarian programs.

To maintain the sustainability of its social business standing, Putera Sampoerna Foundation acts as CSR operator that has been trusted by more than 300 corporations, organizations and associations to run corporate social responsibility (CSR) programs. Putera Sampoerna Foundation was awarded the ISO 9001: 2008, the international quality management system certificate. Periodically, Putera Sampoerna Foundation follows an audit conducted by independent international auditors and publishes the results in the annual report that can be accessed by the public on the Putera Sampoerna Foundation website. For more information, please visit: www.sampoernafoundation.org.

About Sampoerna University
Sampoerna University, under the Sampoerna School System flag, was established as one the effective ways to increase young Indonesians’ access to international standard education. Sampoerna University has become an effective institution for improving access to international education for Indonesia’s young people to create highly qualified future leaders. The existence of Sampoerna University cannot be separated from the establishment of Putera Sampoerna Foundation in 2001 and its track record in improving education quality in Indonesia for more than 10 years. The forerunner of the university emerged in 2009, when Putera Sampoerna Foundation established the Sampoerna School of Education and the Sampoerna School of Business in 2010. In 2013, Sampoerna School of Education and Sampoerna School of Business were transformed the into the Faculty of Education and Faculty of Business under Sampoerna University, with two  new faculties, the Faculty of Science & Technology and the Faculty of Art, Design & Media, as well as the language centre, the Institute of Language and Communications.

For further information, please contact:

Nurul Aini Alina Sukmayanti Pranoto
Public Relations & Publicity VP External Relations | Communications
Putera Sampoerna Foundation HSBC Indonesia
Tel: (021) 577 2340 Tel: (021) 3040 5389
nurul.aini@sampoernafoundation.org alinasukmayanipranoto@hsbc.co.id