Banking - Strategy to increase slowing TPF growth

Banking - Strategy to increase slowing TPF growth The growth of third-party funds (TPF) in banking continues to slow. Bank Indonesia's money circulation analysis data revealed that as of January 2024, banking deposits only grew 5% on an annual basis (yoy), reaching IDR 8,169 trillion. Not only is it growing slowly, but there are even some banks that are not growing or experiencing a decline in deposits. One of the banks that experienced a decrease in deposits was PT Bank Mega Tbk (MEGA). According to the bank, it will encourage deposit growth by focusing on increasing retail customers. (Source : Kontan) Comment : Bank Mega is not the only bank that experienced slowing TPF growth. Retail-based customers will continue to be the main focus for most banks, while others will prefer to focus on CA deposits by strengthening penetration into corporate-based customers. In all, we believe most banks are likely to record better TPF growth due to the low-based effect of the COVID period, where spending recovery has shrank TPF. All banks under our coverage are likely to note the TPF amount better this year and will continue to be in a good position to capture continuing loan demand growth this year. Maintain OW for the banking sector, with BBRI and BBNI as our top picks.