OJK Optimistic That The Banking Sector Continues To Strengthen Amid Global Economic Challenges

Banking (Photo: Antara)

JAKARTA - Chief Executive of OJK Banking Supervision Dian Ediana Rae, said that the Indonesian banking sector shows strong resilience amid the dynamics of the global economy and politics.

He said that banking performance is projected to remain stable despite a slowdown in credit growth in line with the economic cycle.

"Indonesia's banking industry still shows strong resilience with positive performance towards the global dynamics that occur," he said in his statement, quoted Monday, August 25.

In July 2025, bank credit continued to grow solidly by 7.03 percent yoy, supported by good asset quality with NPL maintained at the level of 2.28 percent and Loan at Risk (LaR) decreased to 9.68 percent.

Credit growth is also still accompanied by increased investment credit growth of 12.42 percent yoy driven by export-based sectors (mining, plantations) as well as transportation, industry, and social services.

Dian said that credit growth is still in line with the sector that supports growth in the second quarter of 2025.

Meanwhile, Third Party Funds (DPK) recorded a growth of 7 percent yoy so that it was also one of the factors driving the strengthening of banking liquidity.

Furthermore, he added that the banking liquidity condition was observed to be adequate and strengthened by solid capital conditions and maintained credit risk.

This condition is reflected in the ratio of AL/NCD and AL/DPK of 119.43 percent and 27.08 percent, respectively, still above the threshold of 50 percent and 10 percent, respectively.

Dian said improved liquidity intensity also shows that banking performance remains strong with the support of good governance implementation and puts forward the precautionary principle in carrying out the projected intermediation function to maintain growth supported by various positive sentiments.

Based on data from June 2025, banking capital is also still solid with high-maintained CAR at 25.81 percent, showing banking readiness to absorb potential risks that will emerge in the future, especially in the midst of volatile global conditions.

Based on the results of the revision of the General Bank Business Plan (RBB) in the first half of 2025, it shows that the target adjustment has become more conservative due to changes in macroeconomic conditions and global dynamics.

However, he said that the OJK projects that the performance of banks in 2025 will remain stable with credit growth being slightly moderated from the target.

"This is in line with the bank's steps to remain cautious in disbursing credit, especially in high-risk segments, but still expansionary in sectors that contribute greatly to the economy and have good prospects," he said.

Meanwhile, based on the results of the OJK Banking Business Orientation Survey (SBPO) in the third quarter of 2025, it shows that commercial banks have an optimistic perception.

Dian explained that this was driven by expectations that domestic macroeconomic conditions would improve so that it would have a positive impact on banking performance, as well as the belief that banks are sufficient to manage risks.

He said that the expectations of banking performance in the third quarter of 2025 remained optimistic, continuing the positive trend from the previous quarter.

Dian said this optimism was supported by the projection of growth of Third Party Funds (DPK) and lending which pushed for increased profits and bank capital.

"This belief is also in line with the improvement in domestic macroeconomic conditions and the bank's steps in expanding credit expansion according to the RBB target. In addition, the decline in BI Rate in May and July 2025 to 5.25 percent contributed to reducing credit costs so that it could potentially increase debtor demand," he said.

In terms of raising funds, Dian said that DPK is expected to grow in line with bank efforts to strengthen funding sources to support credit expansion and maintain liquidity.

He said that this growth was driven by an increase in funds from corporate customers, a strategy to increase low-cost funds, and the entry of central government funds to local banks in the third quarter of 2025.

Furthermore, he said that the OJK also asked banks to always implement adaptive and innovative strategies in dealing with various changes in macroeconomic conditions.

"This aims not only to maintain financial system stability but also to move the wheels of the economy and become an important pillar to continue to support healthy and sustainable economic recovery and growth," he said.

Dian conveyed that the OJK as the banking authority will continue to monitor and take the necessary steps for various potential disruptions to bank performance, disruptions to the stability of the banking system, and public trust to continue to ensure the increasing contribution of the banking sector to the Indonesian economy, and of course by coordinating with various relevant institutions/ministries, especially the Financial System Stability Committee (KSSK).