Banking - Banking DPK grew 8.1% as of April 2024

Banking - Banking DPK grew 8.1% as of April 2024 Bank Indonesia reported that the growth rate of banking third-party funds (DPK) in April 2024 increased significantly amidst still high interest rates, reaching 8.1% on an annual basis (yoy) to IDR8,376.1 tn. This figure is higher than the previous year's growth of 7% year over year as of April 2023. When compared with monthly growth (mom), this figure is also higher than the number of deposits as of March 2024, which grew 7.4% year over year. In detail, total low-cost funds (CASA) grew 7.8% year over year with a fund value of IDR5,251 tn as of April 2024, compared to the previous year's total CASA of IDR4,872.9 tn as of April 2023. Meanwhile, total term savings (deposits) grew 8.7% year over year to IDR3,125.1 tn as of April 2024. This growth was higher than the previous March, which grew 7.8% year over year. And an increase from last year, where deposits only grew 5.4% year over year as of April 2023. (Source: Kontan) Comment : We believe tight liquidity is likely to continue amid the high interest rate environment. We also believe that the TPF growth in April is driven by the potential higher cost of deposits and the year-to-date continuing uncertainty. We expect ‘24F TPF growth will equally record from the DD and TD segments, while SA will remain motionless. Maintain our overweight stance in the banking sector, with BBRI and BBNI as the top picks.)