{
    "success": true,
    "data": {
        "id": 1964719,
        "msgid": "bank-lending-surges-13-58-but-margins-continue-to-erode-1788771129",
        "date": "2026-09-07 14:33:47",
        "title": "Bank Lending Surges 13.58%, but Margins Continue to Erode",
        "author": "",
        "source": "CNBC",
        "tags": "",
        "topic": "Banking",
        "summary": "Indonesia's national banking credit grew 13.58% year-on-year to Rp9,135 trillion in July 2026, led by investment lending and corporate loans. However, the expansion has not translated into stronger profitability, with net interest margin and return on assets both declining, whilst asset quality and capital buffers remain solid.",
        "content": "<p>Jakarta, CNBC Indonesia \u2014 National banking credit disbursement\ncontinued to accelerate through July 2026. However, the increasingly\nrobust credit growth has yet to be matched by an improvement in banks\u2019\nmargins and profitability.<\/p>\n<p>The Financial Services Authority (OJK) recorded that banking credit\nin July 2026 reached Rp9,135 trillion, growing 13.58% year-on-year\n(yoy). This marks an increase compared with June 2026, when growth stood\nat 12.67% yoy.<\/p>\n<p>OJK\u2019s Chief Executive of Banking Supervision, Dian Ediana Rae, said\nbanking intermediation performance continued to strengthen, with an\nincreasingly solid growth trajectory.<\/p>\n<p>\u201cBanking intermediation performance continues to improve with\nincreasingly solid growth. Credit growth in July 2026 rose 13.58%\nyear-on-year,\u201d Dian said at a press conference for the OJK Board of\nCommissioners Meeting for August 2026 on Monday (7\/9\/2026).<\/p>\n<p>By type of use, investment credit was the main engine of credit\ngrowth. Investment credit grew 25.13% yoy, well above working capital\ncredit growth of 11.04% yoy and consumer credit, which grew only 5.38%\nyoy.<\/p>\n<p>By debtor category, corporate credit grew 22.10% yoy. Meanwhile, MSME\ncredit continued its positive trend with growth of 1.62% yoy, up from\n1.05% yoy in June 2026.<\/p>\n<p>By ownership, state-owned bank (BUMN) credit recorded the highest\ngrowth at 16.95% yoy.<\/p>\n<p>Meanwhile, amid this credit expansion, banking margins continued\ntheir downward trend.<\/p>\n<p>OJK recorded that the banking net interest margin (NIM) in July 2026\nstood at 4.32%, down from 4.34% in June 2026. Compared with July 2025,\nthe decline was even deeper, having fallen from 4.57%.<\/p>\n<p>Thus, whilst credit grew at double digits and even reached 13.58%\nyoy, banks\u2019 net interest margins continued to narrow.<\/p>\n<p>Similar pressure was evident in profitability. The banking return on\nassets (ROA) fell to 2.45% in July 2026 from 2.47% in June 2026. In July\n2025, the banking ROA stood at 2.56%.<\/p>\n<p>Nevertheless, the credit expansion has yet to show any significant\npressure on asset quality. The gross NPL ratio was recorded at 2.10%,\nonly slightly up from 2.09% in June 2026.<\/p>\n<p>Meanwhile, the net NPL actually improved to 0.81% from 0.82%. The\nLoan at Risk (LAR) ratio also fell to 8.39% from 8.47% in the previous\nmonth.<\/p>\n<p>In terms of capitalisation, the banking industry\u2019s resilience remains\nstrong. The Capital Adequacy Ratio (CAR) rose to 23.84% from 23.70% in\nJune 2026.<\/p>\n<p>Liquidity also remains adequate, with the Liquid Assets to Non-Core\nDeposits ratio (AL\/NCD) at 102.45% and the Liquid Assets to Third-Party\nFunds ratio (AL\/DPK) at 23.10%. Both remain well above their respective\nthresholds of 50% and 10%. The Liquidity Coverage Ratio (LCR) stood at\n187.5%.<\/p>",
        "url": "https:\/\/jawawa.id\/newsitem\/bank-lending-surges-13-58-but-margins-continue-to-erode-1788771129",
        "image": ""
    },
    "sponsor": "Okusi Associates",
    "sponsor_url": "https:\/\/okusiassociates.com"
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