Banking - The growth rate of bank credit slowed in Nov24

Banking - The growth rate of bank credit slowed in Nov24 The growth rate of banking credit tended to slow down in November 2024. However, the slowdown was not significant. The Governor of Bank Indonesia (BI), Perry Warjiyo, stated that banking credit in November 2024 grew by 10.79% yoy). This is indeed slightly slower than the previous month, which was 10.92% yoy. Furthermore, Perry explained that the growth in credit from the demand side was supported by the stable performance of corporate businesses, including export-oriented corporations. Specifically, investment credit growth remained the highest at 13.77% yoy, followed by consumption credit growth at 10.94% yoy and working capital credit growth at 8.92% yoy. (Source : Kontan). Comment : The observed deceleration in credit growth during the latter part of the year is likely attributable to seasonal factors, as businesses typically commence the formulation of their subsequent fiscal year's operational strategies. The marginal decline in credit expansion underscores the robustness and health of the current lending market. The substantial growth observed in investment credit serves as a compelling indicator of robust business confidence and a proactive investment approach aimed at fostering expansion and growth. While the observed deceleration is of limited magnitude, it remains imperative for Bank Indonesia to maintain vigilant oversight of credit growth trajectories and proactively adjust monetary policy as necessary to ensure the preservation of a balanced and sustainable economic landscape. We maintain an overweight position within the banking sector, with BBCA and BMRI as our preferred investment choices. Within the Islamic banking segment, BRIS is our favored selection.