Indonesian Banking Sector Sees Rising Provisioning Costs

Significant Increase in Major Banks' Expenses

Major Indonesian banks have recorded substantial increases in their provisioning costs through November 2025. PT Bank Rakyat Indonesia (Persero) Tbk (BBRI), one of the country's largest banks, saw its provisioning expenses reach Rp 37.8 trillion, representing a 6.52% year-on-year increase. This significant rise in provisioning costs is part of a broader trend observed across several major banking institutions in Indonesia.

Varied Impact Across Banking Sector

The increase in provisioning costs was not uniform across all major banks. PT Bank Tabungan Negara (Persero) Tbk (BBTN) experienced a dramatic rise, with provisioning expenses surging 139.4% year-on-year to Rp 5.28 trillion. Similarly, PT Bank Central Asia Tbk (BBCA) saw its provisioning costs increase by 92.15% to Rp 3.3 trillion. In contrast, PT Bank Negara Indonesia (Persero) Tbk (BBNI) recorded a more moderate increase of 3.1% to Rp 6.6 trillion.

Implications for Banking Sector in 2026

The observed trend of rising provisioning costs through November 2025 suggests that Indonesian banks may continue to face challenges related to asset quality and credit risk management in 2026. The significant variations in provisioning cost increases across different banks may be attributed to their respective loan portfolio compositions and risk management strategies. As the banking sector navigates these challenges, the overall financial stability and lending capacity of these institutions will be closely monitored by market participants and regulators alike.