...Stress Test Shows Resilience: Fitch Ratings believes most of the nine Indonesian banks we rate (Figure 1) on the international scale are sufficiently resilient to withstand rising NPLs, higher credit costs and a weaker rupiah as their strong profitability and capitalisation cushion them against heightened market volatility, our stress test shows. Pressure would be greater on medium-sized banks with larger mining and foreign-exchange exposure, but their buffers are generally adequate, and some can count on backing from their highly rated foreign parents. Our stress test reinforces the banks' Viability Ratings (VRs), which reflect their varying vulnerabilities and resilience on a standalone basis through credit cycles. The lower VRs of the medium-sized banks factor in their weaker credit-cost tolerance relative to the large banks, although the downside risks are tempered by ordinary support from their foreign-bank parents. Modest Foreign-Currency Exposure: The foreign-currency loan exposure...
