Indonesian Digital Banks Drive Growth Through Digital Adoption

Strong Profit Performance in Q3 2025

Indonesian digital banks demonstrated robust financial performance in the third quarter of 2025, with most reporting double-digit profit growth compared to the same period last year. This positive trend was driven by several key factors, including increased online transaction activities and a declining interest rate environment ¹

Key Drivers of Growth

1. Digital Transaction Surge: The growth in digital banks' profits was largely attributed to the rise in online transactions, particularly in transportation and e-commerce sectors.
2. Interest Rate Environment: The current declining interest rate trend has allowed digital banks to potentially widen their interest rate spreads.
3. Operational Efficiency: Many digital banks have successfully implemented cost-efficient operations, contributing to their improved profitability.

Top Performers in Q3 2025

1. PT Bank Neo Commerce (BBYB): Recorded Rp464 billion in net profit, up significantly from Rp4.06 billion in the same period last year.
2. PT Bank Seabank Indonesia: Achieved Rp408.49 billion in net profit, representing a 40.12% year-on-year growth.
3. PT Bank Jago (ARTO): Reported 131.99% YoY growth in net profit, reaching Rp199.13 billion.

Challenges and Future Outlook

While the current performance is promising, analysts caution that the valuations of these digital banks remain high. Metrics such as price-to-earnings ratio (PER) and price-to-book value (PBV) indicate that their stocks might be overvalued ¹

The cash management business is also seen as a promising growth area for banks, with the adoption of digital platforms expected to drive further expansion ³