Why OJK Claims the Banking Industry's Performance Remains Solid

Head of Banking Supervision at the Financial Services Authority (OJK), Dian Ediana Rae, stated that the performance of the banking industry remains solid despite international rating agencies such as Moody’s and Fitch Ratings revising the outlook for Indonesia’s major banks to negative. Dian claimed that this revision is not due to fundamental performance factors in banking. “The revision of the outlook for Indonesia’s major banks is more driven by the change in the sovereign credit rating outlook from stable to negative, which affects perceptions of risk in the national banking sector as well as the influence of external factors from global macroeconomic dynamics,” said Dian in a press release on Wednesday, 25 March 2026. In general, the ratings of institutions, organisations, or companies in a country are equal to or lower than the sovereign rating of that country. Dian noted that the condition of the national banking industry is in a positive state, with credit growth in January 2026 at 9.96% year-on-year. Credit growth for Core Capital-Based Bank Groups (KBMI) 4 and Himbara (Association of State-Owned Banks) recorded double-digit growth, at 13.34% and 13.43% respectively. Meanwhile, third-party funds (DPK) growth was recorded at 13.48% year-on-year. DPK growth for KBMI 4 and Himbara was 16.32% and 16.38% respectively. From the asset quality aspect, Dian stated that the gross non-performing loan (NPL) ratio is in the range of less than 1% to 3%. She also said that Loan at Risk (LaR) remains controlled and is supported by adequate provisioning. According to Dian, this reflects the implementation of good governance and risk management, particularly in maintaining the quality of credit disbursement. OJK views the outlook adjustment as temporary and has the potential to change again in line with improvements in global and domestic economic prospects. “With these developments, the credit rating outlook going forward has the opportunity to return to a stable or even positive position,” said Dian. Moody’s previously downgraded the outlook or projection for five major Indonesian banks from stable to negative. The five banks are Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI), Bank Central Asia (BCA), and Bank Tabungan Negara (BTN). This outlook downgrade aligns with the decline in Indonesia’s credit rating outlook at the Baa2 level, which was previously stable to negative. “This rating change mainly reflects the negative outlook on Indonesia’s Baa2 credit rating, which indicates increased risk to the credibility of Indonesia’s policies, as reflected in reduced predictability and coherence in the policy-making process, along with less effective policy communication over the past year,” Moody’s wrote in its announcement, quoted on Sunday, 8 February 2026.