Banking - Indonesian bank credit maintains double-digit growth

Banking - Indonesian bank credit maintains double-digit growth In January 2025, it grew by 10.27 percent yoy to IDR7,782 tn. There was a slight decrease compared to the previous month, namely December 2024, which grew by 10.39% yoy or IDR7,827 tn. "The performance of banking intermediation grew positively with a maintained risk profile," said the Executive Head of Banking Supervision at the Financial Services Authority (OJK), Dian Ediana Rae, during the press conference on the results of the OJK Monthly Board of Commissioners Meeting (RDKB) for February 2025 in Jakarta, Tuesday (March 4, 2025). OJK noted that third-party funds (DPK) grew by 5.51% yoy to IDR8,879 tn in January 2025, with demand deposits being the largest contributor to the growth. Previously, DPK in December 2024 grew by 4.48% yoy or amounted to IDR8,837 tn. The liquidity of the banking industry in January 2025 also remains adequate with a liquid asset to non-core deposit (L/NCD) ratio and a liquid asset to third-party funds (L/TPF) ratio of 114.86% and 26.03%, respectively. Dian Ediana Rae mentioned that in December 2024, the AL/NCD and AL/DPK were recorded at 112.87% and 25.59%, respectively. So, actually, it is still above the respective thresholds of 50% and 10%. (Source : Emiten News) Comment : We like the Jan25 loan growth of 10.27 yoy. This figure is coming in within Bank Indonesia ’25 loan growth expectation of 11-13% yoy and arrives within the range of our ‘25F loan growth forecast of 9-11% yoy. We expect total TPF will be better in the upcoming month and thus will support the overall LDR to be much better. Maintain our overweight stance for banking sector. We favor BRIS in Islamic banking, and BBCA and BMRI in conventional banking.