Banking - BI records banking loan growth at 8.9% yoy in Oct23

Banking - BI records banking loan growth at 8.9% yoy in Oct23 Bank Indonesia (BI) recorded that banking credit growth in Oct23 reached 8.99% yoy, or considerably stagnant compared to the previous month which grew 8.96% yoy. According to Bank Indonesia, the growth was supported by increased demand for financing. This is in line with corporate performance and maintained household consumption. On sectoral basis, credit growth is mainly supported by the social services sector, business services and mining. Moreover, sharia financing also continued to increase, reaching 14.68% yoy, while in the MSME segment, credit growth reached 8.36% yoy supported bu KUR distribution. (Source: Kontan). Comment: The flattish growth sounds acceptable as election is approaching, corporate and non-industrial loan demand tend to have a wait and see stance. The Oct23 loan growth was inline and arrives within ours, Bank Indonesia and OJK ’23 expectation. Ceteris paribus, we expect ‘23F loan growth could arrives at the high figure range of ours, BI and OJK forecast. Meanwhile, we also think that the continuing optimistic view from corporates and stable spending from consumer segment likely to underpin ‘24F loan growth to arrive within the same figure with ‘23F.