Banking - Consumption credit still grows despite weakening purchasing power

Banking - Consumption credit still grows despite weakening purchasing power The growth of banking consumption credit is still able to grow in the high single digits across the industry until September 2024, despite the recent weakening of people's purchasing power. Based on data from the Financial Services Authority (OJK), banking consumption credit grew by 10.88% yoy as of September 2024. This figure is higher than the growth in August, which was 10.83% yoy. Meanwhile, several domestic banks recorded double-digit growth in consumption credit, surpassing the industry's growth during the same period. (Source : Kontan) Comment : The banking industry's consumer loan growth through Sept24 remains aligned with the total loans FY24 expectations set by the OJK and BI (KBVS: 10%). Moreover, the industry's overall loan growth is projected to sustain double-digit momentum for the remainder of 2024, primarily driven by consumer and working capital loans, in our view. Looking ahead to 2025, we anticipate continued robust growth in consumer and working capital loans. Additionally, we expect a significant uptick in investment loans as investor confidence likely to strengthens. On this backdrop, we maintain our OW stance on the banking sector. For 2025, we favor BMRI, BBCA, and BRIS (syariah banking) as our top picks.