LAST YEAR MANOJ Nanwani, a research analyst at BNP Paribas Peregrine, had almost completed the depressing task of surveying the distressed Indonesian banking sector when he stumbled across a nugget in the dross. "It's a real bank!" he announced to his clients, proof that there was still a flicker of life in the country hit worst by Asia's 1997 financial crisis.
The commendable bank was a small regional operation based in Java, one of a select group that came through the crisis almost unscathed. Bank NISP's success sprang from its concentration on lending to small and medium-size companies and latterly retail consumers; its base in Bandung, which meant it was closer to and knew more about the affairs of its customers; and its long-term adherence to good governance.
Now, five years after the crisis, a lot more banks are facing up to reality, spurred on by lower interest rates and the inescapable conclusion that the old conglomerate-dominated corporate sector will not revive soon. Driven by the sale of several banks to foreign strategic investors, Indonesian banks are getting down to developing a more discriminating approach to lending. Not surprisingly, many are following Bank NISP's example.