Banking – Loan to infrastructure growth likely to remain intact

Banking – Loan to infrastructure growth likely to remain intact Loan channeling to infrastructure sector estimated to remain growth this year, due to several new government program. If we look at the government's program in 2025, where the Ministry of Public Works, through the Directorate General of Public Works and Housing Infrastructure Financing (DJPI), targets 34 PUPR sector projects to be implemented through the Government-Business Entity Cooperation (KPBU) scheme. There are plans for 14 PPP projects in the Water Resources sector, 10 PPP projects in the roads and bridges sector, 7 PPP projects in the organizational sector, and 3 PPP projects in the housing sector. In addition, the government with the three million houses program also has the potential to boost credit construction, which includes infrastructure. (Source : Kontan) Comment : The government's commitment to infrastructure development, as evidenced by a robust pipeline of KPBU projects and a focus on housing initiatives, signals continued strong demand for infrastructure financing in 2025. This creates attractive opportunities for banks and other financial institutions seeking to expand their lending portfolios within this sector. The diverse nature of these projects, spanning water resources, transportation, and housing, allows for effective diversification within infrastructure lending. The ambitious "Three Million Houses" program, in particular, holds significant potential to boost credit demand, given its scale and focus on addressing housing needs. Despite potential challenges, we anticipate that these projects will collectively contribute to overall sector demand. We therefore maintain our Overweight stance on the banking sector, BBCA and BMRI as our top picks. Within the Islamic banking landscape, we prefer BRIS.