OJK Sees Improved Banking Performance in 2026 Following Management Shakeup

Positive Outlook on Credit Growth

The Financial Services Authority (OJK) is optimistic about Indonesian banks' performance in 2026, following significant management changes in major banks during 2025 ¹

. OJK's Head of Banking Supervision, Dian Ediana Rae, stated that the management overhaul, which was widespread across state-owned, private, and regional banks, is expected to yield better performance in the coming year.

Credit and Deposit Growth

As of November 2025, credit growth reached 7.74% year-on-year (YoY), up from 7.36% in the previous month ²

. OJK projects that credit growth will exceed the lower target range of 8-11% set for 2025. Third-party funds (DPK) grew by 12.03% YoY to Rp9,899.07 trillion, indicating strong public trust in the banking system.

Asset Quality and Capital Adequacy

The gross Non-Performing Loan (NPL) ratio stood at 2.21% in November 2025, slightly higher than the 2.19% recorded in November 2024. The capital adequacy ratio (CAR) was 26.05%, demonstrating robust capital buffers despite a slight decrease from 26.87% in the previous year.

Sectoral Analysis

Investment credit recorded the highest growth at 17.98% YoY, followed by consumption credit at 6.67%, while working capital credit grew by only 2.04%. Corporate credit grew by 12% YoY, while micro, small, and medium enterprises (UMKM) credit faced challenges, remaining contracted.

Bank Indonesia's Perspective

Bank Indonesia (BI) shares OJK's optimism, with the central bank expecting credit growth to reach the target range of 8-11% by year-end. BI's Head of Macroprudential Policy, Solikin M. Juhro, highlighted that the strong growth in investment credit indicates positive business sentiment and confidence in the economy's medium-term prospects ²

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Challenges and Opportunities

While the banking sector shows resilience, challenges remain, particularly in working capital credit, which grew by only 2.39% YoY. Solikin noted that this reflects the still-recovering operational conditions in certain economic sectors. Nonetheless, the banking system's overall resilience is supported by strong capital buffers and liquidity.