Banking - Successfully reduces CoC in Feb25

Banking - Successfully reduces CoC in Feb25 Large banks in Indonesia successfully reduced credit costs (CoC) in February 2025, showing optimism regarding the improvement in the credit quality of these banks. Referring to the financial report, among the banks classified in the KBMI 4 category, BBRI recorded the most significant decrease in credit costs. The bank, known for its close ties to the small community segment, recorded a CoC of 3.28% in February 2025. Next, BBCA also recorded a significant decrease in credit costs. On a monthly basis, BCA's CoC decreased by 71 basis points (bps) to 0.05% in February 2025. BBNI also experienced a significant decrease in credit costs, with a CoC of 0.73% in February 2025, down from the previous month which was recorded at 0.82%. Meanwhile, BMRI is the only bank in the KBMI 4 category that experienced an increase in credit costs on a monthly basis. The increase reached around 31 bps, becoming 0.82%. (Source : Kontan) Comment : In summary, the data suggests a positive trend in credit quality for most major Indonesian banks in February 2025, as evidenced by the reduction in their credit costs. While Bank Mandiri saw a slight monthly increase, its year-to-date figures still indicate an improvement compared to the previous year and are better than their internal targets. Maintain an overweight stance on the banking sector, with BBCA, BMRI, and BRIS (syariah banking) as our top picks.