Bank Jakarta Chooses Quality Growth amid Rising Interest Rates

Bank Jakarta President Director Agus H. Widodo. (Photo: Bank Jakarta)

JAKARTA - Bank Jakarta has chosen a healthy and quality growth strategy amid increasing cost of funds (cost of funds) pressure and increasingly challenging financial industry dynamics.

Bank Jakarta President Director Agus H. Widodo said the company would not pursue aggressive growth amid the changing market conditions. Instead, Bank Jakarta will be more selective in developing its business by prioritizing asset quality and growth sustainability.

"We are not chasing big growth, but what we are chasing is healthy and quality growth," said Agus in a discussion "Shaping the Next Era of Indonesia's Capital Market", Investor Day 2026, Indonesia Stock Exchange Building, Jakarta, Tuesday, June 30.

According to him, the banking industry is currently facing new challenges that are different from a few years ago. In addition to global economic uncertainty, banks are also starting to face an increase in fund costs that have the potential to suppress industry performance.

Agus revealed that the interest rate on deposit in the fund auction had touched 11.5 percent. This condition is a signal of the increasing cost of fund collection that must be anticipated by the banking industry.

"This is a warning for banks. It means that the cost of banking funds will increase significantly in the future," he said.

However, Agus emphasized that the increase in fund costs does not mean hindering Bank Jakarta's expansion steps. The company continues to prepare various strategies to maintain business growth while maintaining portfolio quality.

One of the steps taken is to diversify funding sources, including optimizing the potential for cheap funds that come from the DKI Jakarta Provincial Government ecosystem.

Banking Fundamentals Remain Strong

In the midst of these various challenges, Agus assessed that the fundamental conditions of the national banking industry are still in a strong position.

This is reflected in the positive credit growth, high capitalisation, maintained liquidity, and the ratio of problem loans or non-performing loans (NPL) which is still under control.

"The problem is actually not in the fundamentals, but the playing field has changed," he said.

According to Agus, in recent years the financial industry has faced various events that are difficult to predict, ranging from pandemics, global geopolitical conflicts, to changes in international trade policies that affect the financial market.

To answer this challenge, Bank Jakarta continues to carry out transformation in various business lines, ranging from business transformation, digitization, strengthening risk management to the formation of a new work culture.

Agus said that changes in customer behavior are also an important factor that drives the transformation of the banking industry. Currently, people no longer only see the products offered by banks, but also consider the ease, speed, security, and completeness of the services available.

"People don't see the bank from its products, but from how easy, cheap, fast, and secure the services or even the ecosystem offered by the bank itself," he said.

Through its selective growth and sustainable transformation strategies, Bank Jakarta is optimistic that it can maintain healthy growth while improving competitiveness amid changes in the increasingly dynamic financial industry landscape.