Banking Sector Update 27 Jan 2026

KBVS Update
Tuesday, 27 January 2026

Banking - Inline FY25, ‘26F loan growth play vital role
(Maintain Overweight)

* Indonesia’s banking sector wrapped up 2025 with solid momentum (a spike in investment loans and robust liquidity).

* While 1Q26 loan growth may face seasonal moderation and market confidence remain flattish due to prolonged domestic cautious business activity outlook as well as boiling geopolitical uncertainties, the outlook for the sector should remain intact as declining funding costs, sticky loan yield, steady solid CIR, Non-II and manageable provisions are expected to sustain earnings.

* Pressure on the banking stocks has provide an attractive discount. We favor BMRI, BBCA, and BRIS as top picks, betting on their ability to leverage volume growth and operational efficiency to navigate potential yield compression and maintain steady performance throughout the year.

* Maintain Overweight on the sector, with stocks pecking order: BMRI IJ > BBCA IJ > BRIS IJ.

Regards,
Akhmad Nurcahyadi - KBVS Research