Jakarta. Indonesia’s banking landscape is poised for significant upheaval in 2025, as liquidity challenges and slowing credit growth reshape the industry. According to a report by CLSA, state-owned Bank Mandiri (IDX: BMRI ) is expected to overtake state-owned Bank Rakyat Indonesia (IDX: BBRI ) as the country’s most profitable bank by net profit.
CLSA’s research forecasts Bank Mandiri’s net profit to grow modestly by 0.4 percent to Rp 60.3 trillion ($3.69 billion) in 2025, beating BRI’s expected net profit of Rp 57 trillion – a sharp decline of 19 % from previous forecasts. In contrast, the net profit of Bank Central Asia (IDX: BBCA ) is expected to fall slightly by 1 percent to Rp 57.6 trillion, placing it behind Mandiri.
The report highlights that Bank Mandiri’s stable performance, combined with a relatively high profit base, positions it as the main contender amid tightened liquidity conditions and challenges in credit expansion. For 2024, however, BRI is still expected to lead with a net profit of Rp 58.8 trillion, ahead of Mandiri (Rp 56 trillion) and BCA (Rp 54.5 trillion).
Indonesia’s government has set a credit growth target of 11-13 percent for 2025, slightly higher than the target of 10-12 percent for 2024. However, the country’s four largest banks signal a more cautious outlook. CLSA notes that Mandiri’s slower credit growth stems from its already large base, while BRI remains conservative as it focuses on improving its micro-lending segment.
Retail credit is expected to be the main driver of growth in 2025, with potential support from monetary policy easing. CLSA forecasts a 50 basis point cut in Bank Indonesia’s (BI) benchmark interest rate to 5.5 percent this year. However, liquidity challenges remain due to a volatile rupiah and expected increases in government bond issuance to support fiscal expansion.
CLSA maintains an “outperform” rating for major Indonesian banks, including Bank Central Asia, Bank Rakyat Indonesia and Bank Mandiri, as well as state-owned Bank Negara Indonesia (IDX: BBNI ) and Bank Tabungan Negara (IDX: BBTN ). The target prices for these banks are Rp 12,100, Rp 5,100, Rp 7,700, Rp 5,950 and Rp 1,450 respectively. In contrast, BTPN Syariah (IDX: BTPS ) and Bank Jago (IDX: ARTO ) were rated ‘hold’, reflecting their less favorable outlook.
Despite tightening liquidity, CLSA notes that asset quality remains stable, with adequate coverage for high-risk loans for large banks. Stable credit costs are expected to provide some relief to the sector as it navigates a challenging macroeconomic environment.
Tags: Keywords:
