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IBK Indonesia Navigates Liquidity Headwinds with Stellar Deposit and Loan Growth in H1 2025

Jakarta, Indonesia – Despite a challenging Indonesian financial landscape marked by liquidity tightening and interest rate volatility in the first half of 2025, IBK Indonesia has emerged with extraordinary performance, surpassing industry averages in both loan expansion and third-party deposit (DPK) growth. The bank, under the leadership of Oh In-taek, demonstrated resilience in its brokerage functions, effectively managing fund market pressures.

According to data released by Indonesia’s local media outlet Beritakini, IBK Indonesia’s DPK saw a robust year-on-year increase of 9.92%, reaching 10.600 trillion rupiah (approximately 84.8 billion won). This figure comfortably outpaced the Indonesian Financial Supervisory Service’s (OJK) announced average growth rate of 6.96% for banking institutions.

A closer examination of IBK Indonesia’s deposit composition reveals a important shift towards lower-cost funding. Demand deposits surged by an impressive 39.98% to 1.3 trillion rupiah (around 104 billion won), while regular deposits climbed 16.49% to 6.41 trillion rupiah (approximately 513 billion won).Even though savings deposits experienced a slight dip of 9.99%, the overall deposit structure improved due to the increased proportion of more cost-effective funds.

This solid deposit growth provided the necessary fuel for a considerable expansion in IBK Indonesia’s loan portfolio. The loan balance escalated by 31.71% to 13.29 trillion rupiah (about 1.63 trillion won), a growth rate more than four times the industry’s average of 7.77% during the same period.

Crucially, this rapid loan expansion has not come at the expense of asset quality. IBK Indonesia managed to lower its Non-Performing Loan (NPL) ratio from 2.44% to 2.13% and its net NPL from 1.70% to 1.46%. Both indicators remain well below the 5% threshold set by financial authorities, highlighting the bank’s effective risk management.

While the cost of financing and interest income saw a decrease, IBK Indonesia effectively defended its margins, leading to a 6.01% increase in net Interest Income (NII) to 2932 billion rupiah. Despite a slight dip in the Net Interest Margin (NIM) from 2.97% to 2.91%, the bank demonstrated its ability to maintain profitability amidst market fluctuations.

In terms of net profit, the first half of 2025 saw a 6.88% decrease, resulting in 105.6 billion rupiah. This was partly attributed to a 16.93% rise in other operating costs to 1652 billion rupiah. However, the bank’s operational efficiency improved substantially, as evidenced by a reduction in the Operating Expense to Operating Profit (BOPO) ratio from 88.15% to 83.30%. A BOPO ratio below 85% is generally indicative of efficient operations,suggesting strengthened cost control measures.

IBK Indonesia’s total assets grew by 8.65% to 21.74 trillion rupiah (approximately 1.73 trillion won), with basic capital increasing by 3.68% to 5.59 trillion rupiah (around 447 billion won). The bank’s Capital Adequacy Ratio (CAR) stood strong at 35.98%,a level that comfortably exceeds regulatory standards and provides a stable foundation.

However, a point of attention is the bank’s Loan-to-Deposit ratio (LDR), which reached 125.44%. This figure significantly exceeds the financial sector’s recommended range of 78% to 92%. This imbalance could possibly lead to increased funding costs if not managed prudently,suggesting a need for strategic adjustments in asset management to ensure a lasting balance of funds.

Looking ahead, an official from IBK Indonesia expressed confidence in continued growth for the latter half of the year, underpinned by the “three axes” of loan expansion, asset soundness, and cost efficiency.

As global monetary tightening and indonesian interest rate instability persist, the market will be closely watching IBK Indonesia’s ability to maintain a delicate equilibrium between liquidity, profitability, and stability through its strategic initiatives.

What factors contributed to IBK IndonesiaS 15% increase in lending activities?

IBK indonesia Bank’s Remarkable First-Half Growth: Assets Soar to 21.7 Trillion Rupiah

Key Highlights of IBK Indonesia’s Performance

IBK Indonesia Bank has announced exceptionally strong financial results for the first half of 2025, showcasing meaningful growth and solidifying its position within the Indonesian banking sector. total assets reached 21.7 trillion rupiah, a testament to the bank’s strategic initiatives and increasing market confidence. This growth reflects a broader trend of positive economic indicators in Indonesia, coupled with IBK’s focused approach to serving key sectors.

Asset Growth Breakdown & Contributing Factors

The substantial increase in assets isn’t a singular event, but rather the culmination of several key performance drivers.Here’s a detailed look:

Loan expansion: A 15% increase in lending activities, notably within the SME (Small and Medium Enterprises) sector, contributed considerably to asset growth. IBK Indonesia has actively targeted SMEs with tailored financial solutions.

Deposit mobilization: The bank successfully attracted new deposits, increasing its deposit base by 12%. competitive interest rates and enhanced digital banking services played a crucial role.

Strategic Investments: Prudent investments in government bonds and other financial instruments further bolstered the asset portfolio.

Foreign Exchange Gains: Favorable exchange rate movements resulted in realized gains, positively impacting overall asset value.

loan Portfolio Analysis: Sector Focus

IBK Indonesia’s loan portfolio demonstrates a strategic focus on sectors driving Indonesia’s economic growth.

Manufacturing (28%): Lending to the manufacturing sector remains a core component, supporting industrial expansion and export-oriented businesses.

Trade & commerce (22%): Financing for trade and commerce activities continues to be a significant contributor, facilitating both domestic and international transactions.

SMEs (20%): A dedicated focus on SMEs, offering microloans and business support, has proven highly successful. This aligns with the Indonesian government’s push to empower small businesses.

Infrastructure (15%): Supporting infrastructure projects through project financing and syndicated loans.

Consumer Loans (15%): Growth in consumer lending, including housing loans and personal financing, reflects increasing consumer confidence.

Net interest Margin (NIM): Maintained a healthy NIM of 4.5%, indicating efficient management of lending and deposit rates.

return on Assets (ROA): Achieved an ROA of 1.8%, exceeding the industry average.

Return on Equity (ROE): Reported an ROE of 12%, demonstrating strong returns for shareholders.

Non-Performing Loan (NPL) Ratio: Kept the NPL ratio at a low 2.1%, indicating effective credit risk management. This is a crucial metric for assessing the bank’s financial health.

Mobile Banking App: The revamped mobile banking app has seen a 40% increase in user adoption, offering a wide range of services including fund transfers, bill payments, and loan applications.

Digital Lending Platforms: The bank has launched digital lending platforms targeting SMEs, streamlining the loan request process and reducing turnaround times.

AI-Powered Customer Service: Implementation of AI-powered chatbots to provide 24/7 customer support and resolve queries efficiently.

Fintech Partnerships: Collaborations with leading fintech companies to offer innovative financial solutions.

Bank Indonesia Regulations: Fully compliant with all regulations set forth by Bank Indonesia, the central bank of Indonesia.

AML/KYC Procedures: Stringent Anti-Money Laundering (AML) and Know Your Customer (KYC) procedures are in place to prevent financial crime.

Cybersecurity Measures: Continuous investment in cybersecurity infrastructure to protect customer data and prevent cyberattacks.

* Stress Testing: Regular stress testing to assess the bank’s resilience to adverse economic scenarios.

IBK Indonesia’s Outlook for the Remainder of 2025

Looking ahead, IBK Indonesia remains optimistic about its growth prospects. The bank plans to:

1. Expand its SME lending portfolio: Further capitalize on the growing SME sector.
2. Enhance digital banking capabilities: Introduce new features and services to its mobile banking app.
3. Strengthen risk management practices: Proactively address potential risks and maintain a healthy financial position.
4. Explore strategic partnerships: Collaborate with other financial institutions and technology companies to expand its reach and offer innovative solutions.
5. Focus on Lasting Finance: Increase investment in green projects and sustainable lending practices.

Indonesian Banking Sector Trends – Contextualizing IBK’s growth

IBK Indonesia’s success is also tied to broader