Banking - Sharia Bank Strategy in the Middle of High Interest Rate Trends

Banking - Sharia Bank Strategy in the Middle of High Interest Rate Trends In the midst of the trend of high benchmark interest rates, the sharia-based home ownership credit (KPR) business is experiencing its own blessings. This is because sharia mortgages use a murabahah contract, which makes the installments fixed throughout the term of the mortgage, in contrast to conventional banks, which provide mortgages with fixed, sweetened interest in the first one to three years and then follow movements in the reference interest rate. BCA Syariah, for example, recorded growth in iB KPR financing of 110% until May 2024, or reaching IDR915 bn compared to the same period the previous year. Home financing at Bank Syariah Indonesia (BRIS) also continues to experience positive growth. Until April 2024, BRIS Griya's financing reached IDR53.4 tn, growing 8.36% yoy. CIMB Niaga Sharia Director Pandji P. Djajanegara said that Sharia KPR financing at CIMB Niaga Syariah as of April 2024 experienced growth of IDR26 tn. (Source: Kontan) Comment : Sharia mortgage products have become more competitive in the past several years. This has been proven by higher mortgage demand. We believe the segment will become one of the main financing growth drivers. Despite some banks noting its sharia segment as a business unit, we think it will have a positive impact on overall consumer segment loan growth, as historically proven. Maintain our OW stance for the banking sector.