Banking - Banking credit growth forecast for Q4 2024

Banking - Banking credit growth forecast for Q4 2024 Despite a recent slowdown, the banking sector remains optimistic about credit disbursement. In fact, a further acceleration in bank credit is anticipated for the final quarter of 2024. This outlook is supported by the Bank Indonesia Banking Survey (SPBI) conducted at the end of the third quarter. The survey indicates that new credit disbursement is expected to increase in Q4 2024, as reflected by the Weighted Net Balance (WNB) value, which has risen from 80.6% in Q3 2024 to 88.3% in Q4 2024. The survey also reveals that the primary focus of respondents for new credit disbursement in Q4 2024 remains consistent with previous quarters, prioritizing working capital loans followed by investment and consumer loans. (Source : Kontan) Comment : The Bank Indonesia survey results align with our expectations, reinforcing our confidence in achieving sustained credit growth exceeding 10% yoy until the end of 2024. From a sectoral perspective, working capital and investment credit are poised to be the primary drivers of this growth. Additionally, consumer credit, particularly car loans, is expected to receive a significant boost in the fourth quarter. A potential upside surprise may emerge if increased optimism surrounding the new government leads to accelerated investment credit growth in the fourth quarter, surpassing our current projections. We retain our overweight stance on the banking sector, with Bank Rakyat Indonesia (BBRI) and Bank Negara Indonesia (BBNI) as our preferred picks.