Banking - In 2024, corporate banking credit could grow soft

Banking - In 2024, corporate banking credit could grow soft The latest Bank Indonesia (BI) survey regarding demand and supply of banking financing stated that corporate financing originating from new credit applications to domestic banks recorded a decline. This is reflected in the Weighted Net Balance (SBT) related to additional loans to banks which was at the level of 12.7% as of October 2023. In the previous month, the WBT was at the level of 18.9%. The survey shows that corporations will use more of their own funds from retained earnings for financing in the next three months. Where, the SBT from this funding source is at the level of 73.9%. (Source: Kontan). Comment: It is too soon to conclude that corporate loan will slow in 2024. On the assumption of economic resiliency will remain in place next year, industry loan growth likely to arrive within the same figure or even better than in ‘23F. We also expect better disposable income supported by higher UMP could resulting to a better consumer loan, while stable SME segment loan demand likely to sustain continue intact on the back of continuing spending and stable grass roots business activity.