Banking – April24 industry total loan grew 13.09% yoy

Banking – April24 industry total loan grew 13.09% yoy The Financial Services Authority (OJK) reported that banking credit as of April 2024 grew by 13.09% yoy to IDR7,310 tn. Chief Executive of OJK Banking Supervision, Dian Ediana Rae, said that this significant credit distribution continues the trend of credit growth in the previous period and is in line with the credit growth target in 2024. "This good credit growth trend shows the high support and commitment of banks to supporting national economic growth," said Dian. In line with credit growth, third-party funds (DPK) also experienced positive growth, both monthly and annually. In April 2024, DPK was recorded 8.21% yoy higher to IDR8,653 tn and noted a much better figure vs the previous month growth of 7.44% yoy. Current accounts are the largest contributor to DPK growth (11.81% yoy). (Source: Kontan) Comment : The April 24 total loan growth surpasses our ‘24F total loan growth for the banking sector (10% yoy). We expect working capital loans to continue as the ‘24F growth driver, while investment loans are likely to grow much better in 2H24. On the consumer segment, pressures should remain as a continuing higher interest rate environment and the latest Indo benchmark rate increase could postpone consumer loan demand. We like industry TPF growth in the same period and expect a sustainable growth rate in the following month. All in all, we believe the LDR posture will continue to be sizeable enough to capture the upcoming loan demand this year. Maintain our OW stance for the banking sector.