Indonesian banks’ loan growth expected at 8% to 10% in 2026 with slower H2 rise

Auto lending contracted, whilst MSME and consumer loans’ quality softened.

Indonesian banks’ loan growth is anticipated to moderate in H2 2026 following robust growth in H1 as liquidity tightens, said Maybank Investment Banking Group (IBG) Research.

Industry loan growth is expected to fall between 8% to 10% for FY2026.

System loan growth was robust at 12.6% YoY in June 2026, faster than the 11.5% YoY rise the previous month, said Maybank IBG Research analyst Jeffrosenberg Chenlim and Faiq Asad, citing central bank data.

Construction, utilities, and manufacturing sectors helped drive loan growth during the month, whilst other sectors grew at a considerably slower pace, the analysts said.

Auto lending contracted by 8.7% in June, whilst multipurpose and mortgage growth remained stable, they added.

Loan quality remained stable with the non-performing loan (NPL) ratio at 2.17% at May 2026, compared to 2.14% in January.

“Although overall quality remains manageable, some key areas saw quality softening, primarily in [micro, small, and medium enterprises (MSME)] and consumer loans,” the analysts said.

Softer purchasing power amongst lower and middle-income segments may have affected these segments more significantly, they said.

“However, we anticipate loan growth to moderate as liquidity will tighten and expect industry loan growth of 8%-10% for FY26E,” the analysts said.