Mid-Cap Bank Alert! Panin Loses Growth, SMBC Already in the Red

Jakarta, CNBC Indonesia — The performance of two mid-tier banks, PT Bank Pan Indonesia Tbk (PNBN) and PT Bank SMBC Indonesia Tbk (BTPN), is facing similar pressures. Both are grappling with challenges in their core business, namely loan disbursements.

In the 2025 fiscal year financial report, Bank Panin still managed to record a net profit of Rp2.87 trillion, relatively stable compared to the previous year. However, behind this, a slowdown in the main growth engine is evident.

Loans disbursed declined compared to the previous year, reaching Rp130.1 trillion from Rp132.5 trillion. Over the same period, net interest income stagnated at around Rp8.9 trillion.

Rather than being supported by loan expansion, Panin’s profit was largely driven by non-interest income, including gains from securities sales and changes in the fair value of financial instruments. Additionally, cash flow from operating activities was recorded at a negative Rp1.88 trillion, reversing from a positive Rp19 trillion the previous year.

This situation reflects a defensive strategy to contain credit risk, but with the consequence of sidelining growth.

On the other hand, Bank SMBC Indonesia shows a different direction. Loans actually grew to Rp152.3 trillion from Rp146.8 trillion. However, this expansion was accompanied by a sharp surge in credit loss provisioning expenses (CKPN) to Rp8.04 trillion, more than double the previous year.

As a result, operating profit was drastically eroded, and the bank recorded a net loss of Rp102 billion, down from a previous profit of Rp3.2 trillion.

Nevertheless, SMBC’s operational cash flow remained positive at Rp4.88 trillion, indicating relatively maintained liquidity. However, compared to the previous year, it experienced a correction of more than 50%.

This difference in performance illustrates two opposing approaches. Panin chose to hold back expansion to maintain asset quality, while SMBC continued to grow but had to face pressures on credit quality.

However, when examined more deeply, both show a common thread: the intermediation function of both banks is not operating optimally.

For Panin, loans did not grow, thus unable to drive profit. For SMBC, loans grew but were accompanied by a surge in risk that actually pressured profitability.

This condition indicates pressures within the banking industry, namely rising funding costs that squeeze interest margins and deteriorating credit quality that forces banks to increase provisioning.