Economist: Second Quarter Bank Performance Maintained Despite Limited Growth Space
Jakarta (ANTARA) - The Chief Economist of Permata Bank, Josua Pardede, estimates that banking performance in the second quarter of 2026 remains relatively stable, although the space for growth is more limited compared to the beginning of the year. Regarding the fundamentals of performance, the banking sector continues to be supported by near double-digit credit growth, strong third-party funds (DPK), adequate liquidity, controlled credit quality, and substantial capital.
“This indicates that financial market volatility has not yet transformed into systemic pressure on the banking industry,” Josua stated when contacted in Jakarta on Monday. However, he cautioned that rupiah volatility, rising yields on Government Securities (SBN), foreign capital outflows from equities, and concerns regarding fiscal policy direction and market stability will cause banks to be more cautious in distributing credit and managing risks.
“Bank performance in the second quarter is likely still supported by strong business fundamentals, particularly from corporate credit, investment credit, and ongoing household consumption,” he said. Josua explained that the impact of market uncertainty is beginning to manifest through several channels. Firstly, funding costs could potentially increase if banks must offer more attractive deposit rates to maintain liquidity. Secondly, the weakening rupiah could pressure debtors with import needs or foreign currency debts lacking adequate hedging. Lastly, rising SBN yields could depress the value of securities held by banks, particularly those recorded at market price.
“Therefore, the impact of financial market volatility on core performance is not yet significant, but pressure is emerging in funding costs, profit margins, and market risk management,” Josua explained. He assessed that if market volatility persists into the second half of the year, the banking outlook remains resilient, but profit growth may become more moderate. Large banks with strong low-cost funds, thick capital, high-quality debtors, and disciplined foreign exchange risk management will be better positioned to endure. Conversely, banks more dependent on high-interest deposits, those with narrower liquidity margins, or those heavily financing sectors sensitive to exchange rates and interest rates will be more vulnerable.
“In a scenario of continued pressure, credit will still grow, but banks will be more selective. This means the banking industry is not entering a phase of sharp decline, but rather a phase of more cautious growth,” said Josua. He also warned that if credit growth slows alongside rising non-performing loans (NPL) and a decline in low-cost funds, market pressure could be said to be impacting banking performance. However, if credit continues to grow, liquidity remains strong, and NPLs are controlled, market volatility can still be well-absorbed.
According to records from the Financial Services Authority (OJK), banking credit in April 2026 grew by 9.98 per cent year-on-year (yoy) to Rp8,755 trillion. By usage type, investment credit saw the highest growth at 19.48 per cent, followed by consumer credit at 6.13 per cent, and working capital credit at 6.04 per cent. Meanwhile, third-party funds (DPK) grew by 11.39 per cent (yoy) to Rp10,077 trillion, with current accounts, time deposits, and savings growing by 16.99 per cent (yoy), 8.65 per cent (yoy), and 9.00 per cent (yoy) respectively. Credit quality remains stable, with a gross NPL ratio of 2.17 per cent and a net NPL maintained at 0.84 per cent. Furthermore, the capital adequacy ratio (CAR) stands at 23.97 per cent, indicating strong banking capital resilience as an adequate risk mitigation buffer.