\definemeasure[CAindent][12pt]
% Every chapter body text starts with a drop cap:
\setupinitial[n=3,m=1,-\measure{CAindent}]]
\setupindenting[yes,\measure{CAindent}]
\starttext
\placeinitial S{\bf{\kap uppose we}} have a system for the approval of
loans. \input knuth
\stoptext
both the initial and the bold stuff after it is indented. With hoffset I can move the initial, but not what comes after. I have been experimenting but haven’t found a way to solve this.