Banking - OJK is optimistic that banking credit will grow 11% in 2024

Banking - OJK is optimistic that banking credit will grow 11% in 2024 The Financial Services Authority (OJK) is optimistic that banking credit growth in 2024 could be in the range of 9%–11%. "We are optimistic that banking credit growth in 2024 will align with our initial target of 9%-11%," said Dian Ediana Rae, Chief Executive of Banking Supervision. Meanwhile, until August 2024, banking credit growth reached 11.40% yoy, up from 9.06% the previous year. On a ytd basis, credit also increased by 5.89%, higher than the ytd growth in August 2023 of 4.92%. (Source : Kontan) Comment : We believe total loan growth in 2024 will remain above double digits. Our conservative growth assumption for the banking sector is approximately one percentage point below the OJK's expectation. The corporate segment will continue to play a significant role, while consumer loans will generally support investment loans. Investment lending is likely to decline slightly due to the year-end effect, as most corporations begin recalculating their capital structure for 2025. We maintain our overweight rating on the banking sector.