Banking - The phenomenon of slowing bank credit: a sign of a stagnant economy

Banking - The phenomenon of slowing bank credit: a sign of a stagnant economy The disbursement of domestic banking credit has slowed down again, although it remains at a fairly high level. Bank Indonesia (BI) recorded bank credit growth of 9.37% in February 2026, down from the growth of 9.96% in January 2026. The slowdown occurred across all credit segments. Based on the usage group, investment credit grew by 20.72% yoy in February 2026. Meanwhile, working capital credit and consumption credit grew by 3.88% and 6.34% yoy, respectively. The growth realisation in that period decreased compared to the realisation from the previous month. In January, investment credit recorded a yoy growth of 22.38%, working capital credit increased by 4.13%, and consumption credit rose by 6.58% yoy. (Source : Kontan) Comment : The potential slowdown is a cautionary signal rather than a red alert. The high level of investment credit shows the "bones" of the economy are still growing, but the weak consumption and working capital segments suggest that daily economic activity is under pressure. For growth to accelerate, the focus must shift from merely providing liquidity to restoring consumer confidence and purchasing power. Maintain overweight stance for the sector, with stocks pick : BMRI, BBCA and BRIS.