Banking - Bank Credit grew buly 9.69% yoy in 2025

Banking - Bank Credit grew buly 9.69% yoy in 2025 BI Governor Perry Warjiyo stated that bank credit in 2025 grew by 9.69% (yoy), still within BI's forecast range of 8%–11% (yoy). Based on usage groups, credit growth was driven primarily by investment credit, which surged 21.06% (yoy). Meanwhile, consumer credit grew 6.58% (yoy), and working capital credit recorded more moderate growth of 4.52% (yoy). Meanwhile, from the supply side, banking financing capacity is considered adequate. Bank liquidity is supported by a high Liquid Assets to Third Party Funds (AL/TPF) ratio of 28.57%, as well as Third Party Funds (TPF) growth of 13.83% (yoy) in December 2025. Bank lending appetite also continues to improve. This is reflected in increasingly relaxed lending requirements, although BI notes exceptions in the consumer and MSME credit segments. Looking ahead, Bank Indonesia projects bank credit growth in 2026 to be in the range of 8%–12%. (Source : Kontan). Comment : We like the banking sector loan growth of 9.69% yoy, amid the prolonged uncertainty and ‘25F various headwinds. The growth arrived within our ‘25F forecast for domestic banking loan growth. Better macro key activity play crucial role. Yet, with the remaining uncertainty and cautious outlook coupled with debtor confidence which likely to continue flat, we think ‘26F loan growth will still <10% yoy, supported mostly by industrial rather than household. We anticipate ‘26F growth likely to be higher (8%-10% yoy) and ‘25F is become as the low based effect. We also expect a 7.0% loan growth as the lowest worst case scenario based figure. Consumer segment (particularly vehicle) is our main concern, while major driver expectation is property related. Meanwhile, manufacturing, wholesale, retail trade, mining, quarrying, electricity, gas supply, financial and insurance are the corporate segment driver. Maintain OW stance for banking sector. Picks: BBCA, BMRI and BRIS (syariah banking).