Indonesian Banking Sector Enters Dividend Season with Strong Yield Expectations

Major Banks Lead the Dividend Payouts

The Indonesian banking sector is kicking off its annual dividend season, with major players like Bank Central Asia (BBCA), Bank Rakyat Indonesia (BBRI), Bank Mandiri (BMRI), and Bank Negara Indonesia (BBNI) expected to distribute significant dividends to shareholders. BBCA has started the trend by announcing an interim cash dividend of Rp 55 per share, representing a 10% increase from the previous year.

Attractive Dividend Yields Across Major Banks

Historical data shows that the dividend yields of these major banks have ranged between 2% to 9% over the last five years, with BMRI and BBRI being particularly attractive in terms of percentage yield. Analysts from Korea Investment & Sekuritas Indonesia (KISI) highlight that these banks have a strong track record of maintaining a stable payout ratio, including regular interim and final dividend payments.

Analyst Insights on Dividend Strategy

Muhammad Wafi from KISI notes that BBCA is known for its stable and predictable dividend distribution model, while BBRI often offers more attractive yields due to its high return on equity (ROE) and strong commitment to shareholder returns. In the current market conditions, dividend hunting is becoming an increasingly attractive strategy as it provides direct cash returns amidst market volatility.

Market Outlook and Investment Strategy

The banking sector is expected to remain solid in the long term, with potential for valuation recovery as interest rates are expected to decline in 2026. Analysts recommend a gradual accumulation strategy during price corrections, focusing on banks with high ROE, large CASA ratio, and stable growth. This approach is expected to provide a balance between dividend income and long-term capital gains potential.

Key Banks for Dividend Investors

1. BBRI: Attractive yield with high ROE
2. BMRI: Consistent dividend payer with strong financials
3. BBNI: Stable dividend history and growth potential
4. BBCA: Defensive choice with strong asset quality and liquidity

Market Conditions Supporting Dividend Investing

Handiman Soetoyo from Solstice Indonesia notes that Indonesian banks are known for their generous dividend payouts, supported by strong capital adequacy ratios (CAR) currently standing at 26.15% as of September 2025, well above regulatory requirements. The current market conditions, with many bank stocks trading below their five-year historical averages, present an opportune time for investors to accumulate shares using a dollar cost averaging strategy.