Indonesia's Financial Services Authority (OJK) published a supervisory update stating that the banking sector remains resilient amid global economic and political dynamics and is projected to stay stable in 2025, even as credit growth moderates in line with the economic cycle. As of July 2025, bank lending grew 7.03% year on year, with asset quality remaining sound as non-performing loans stood at 2.28% and Loan at Risk declined to 9.68%. Investment credit grew 12.42% year on year, supported by export-oriented sectors as well as transport, industry, and social services. Third-party funds grew 7% year on year and liquidity was described as adequate, with AL/NCD at 119.43% and AL/DPK at 27.08%, above thresholds of 50% and 10%; capital remained solid with a capital adequacy ratio of 25.81% based on June 2025 data. OJK also noted that weighted-average rupiah lending rates fell by 7 basis points year on year in July 2025 and assessed there is scope for further declines following the BI Rate cut to 5% as of 20 August 2025, while stressing that pass-through depends on each bank’s cost of funds and calling for funding strategies that increase low-cost deposits and avoid unhealthy rate competition alongside transparency and consumer protection. OJK reported that revised commercial bank business plans for the first half of 2025 became more conservative and reiterated its expectation that 2025 banking performance will remain stable, with credit growth slightly below target and continued caution in higher-risk segments. It also indicated it will continue monitoring potential disruptions to bank performance and banking system stability, including through coordination with the Financial System Stability Committee.

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