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24 December 2024

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Banking 2025 Outlook: Overweight

Strength

Loan growth projected to improve to 11-13% in 2025F, up from 10-12% in 2024F, primarily driven by MSME loans, as fiscal spending shifts focus toward growth and household consumption

 

Weakness

CoC may slightly rise in 2025 as banks operate at highly efficient credit cost levels; CIR is also expected to see a modest increase

 

Opportunity

Potential rate cuts and lower statutory reserve requirement from BI are anticipated to enhance liquidity and reduce CoF, supporting NIM growth

 

Threat
Potential risk of asset quality deterioration due to weaker purchasing power coupled with IDR depreciation on the back of stronger USD for longer

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2025 Banking Outlook

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2025 Banking Outlook

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