OJK Assesses Banking Provisioning Costs as Safe and Adequate

Current Banking Provisioning Levels

The Financial Services Authority (OJK) has concluded that the banking sector's current provisioning costs, known as Cadangan Kerugian Penurunan Nilai (CKPN), are at a safe and adequate level. This assessment comes as several major Indonesian banks have reported significant increases in their impairment expenses during 2025.

Notable Increases in Impairment Expenses

Major banks have shown substantial growth in their provisioning. Bank Central Asia (BCA), for instance, recorded an impairment expense of Rp 3.31 trillion by November 2025, marking a significant increase from Rp 1.72 trillion during the same period in the previous year. Similarly, Bank Tabungan Negara (BTN) saw its impairment expenses surge to Rp 5.28 trillion from Rp 2.21 trillion in the corresponding period last year.

Implications of Higher Provisioning

The increased provisioning reflects banks' cautious approach to potential credit risks, particularly in the current economic environment. While higher provisioning expenses can impact banks' profitability in the short term, they also indicate prudent risk management practices. The OJK's assessment suggests that despite these increases, the overall banking system's provisioning remains adequate to cover potential losses.