Indonesian Banks Face Rising Overhead Costs in Q3 2025

Increase in Operational Expenses

Several major Indonesian banks have reported an increase in their operational expenses or overhead costs for the third quarter of 2025. PT Bank Central Asia Tbk (BCA), one of the country's largest banks, saw its overhead costs rise to Rp 28 trillion in the first nine months of 2025. This represents a 5% year-on-year increase.

Breakdown of Costs

The increase in BCA's overhead costs was primarily driven by a 7.7% rise in general and administrative expenses, which reached Rp 14.5 trillion. Despite the overall increase in costs, BCA managed to slightly improve its cost-to-income ratio (CIR). The CIR decreased by 1% to 29.2% in Q3 2025, down from 30.2% in the same period last year.

Implications for Banking Sector

The rise in overhead costs is a significant development for the Indonesian banking sector. While BCA's CIR improvement is a positive sign, the overall increase in operational expenses could have implications for other banks. The trend may be attributed to various factors including inflationary pressures and increased investment in digital infrastructure.