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Banks Power Up

The banking industry in Indonesia, with its large population and growing economy, is one of the most dynamic sectors in Southeast Asia. 


The "Big 4" banks—BBCA, BBRI, BBNI, and BMRI—are not only market leaders in terms of assets and profits but also key indicators of the nation's economic health and growth.


When we talk about loan growth, these four giants play a central role in channeling credit to various sectors, from big corporations to micro, small, and medium enterprises (MSMEs). 


Each bank has its unique approach to developing its loan portfolio, tailoring strategies to meet the diverse needs of its customers.


In April 2024, the Big 4 banks in Indonesia hit all time high loan growth, marking their best performance in three years.


BBCA, known for its strong reputation among retail customers, saw impressive loan growth in April 2024, rising to 16.6% from 9.6% in April 2023. BBRI, with its focus on the MSME sector, posted solid loan growth in April 2024, reaching 12% from 7.5% in April 2023.


Source: Sucor Research


BMRI, a powerhouse in the corporate sector, experienced extraordinary loan growth in April 2024, increasing to 21.5% from 8.1% in April 2023. BBNI, with its diverse portfolio, also showed spectacular results with loan growth in April 2024, rising to 12.9% from 5.2% in April 2023.


This shows that both public confidence and banking willingness to extend loans have not only recovered but also increased. Remarkably, this all-time high loan growth occurred in April, despite it being the month of Eid Al-Fitr.


After a period of uncertainty, both customers and banks are now more confident in taking risks and investing their capital back into the economy.


Moreover, Bank Indonesia's move to issue repo instruments has significantly boosted liquidity, giving banks more firepower to distribute loans. This policy has been a key catalyst for the surge in loan growth.


Before President Jokowi's era, the loan growth industry had a CAGR of 22%. However, during his presidency, the focus on infrastructure projects led to a drop in CAGR loan growth to 10% due to skyrocketing of government bond issuance to finance these project.


Source: Sucor Research


Seeing the strong growth numbers in this April, there's a growing belief that we can get back to the 20% loan growth rate we had before. Right now, things are already on track and moving in a positive direction.


According to our Chief of Strategy, Pak Arief, if loan growth hits 20%, Indonesia's GDP growth could reach 6.1% as a base case, with the potential to hit up to 8% in the best-case scenario.


Source: Sucor Research


The Big 4 banks in Indonesia are leading the charge, driving the economy forward by providing the necessary liquidity for various business sectors.


With these impressive growth numbers, they’re not just reinforcing their status as key pillars of the national financial sector but also laying a solid foundation for Indonesia’s economic future.


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