JAKARTA — Indonesian banks, including major state-owned lenders like Bank Mandiri and smaller digital competitors, reported strong loan and profit growth in the first half of 2026. This growth has been supported by government liquidity injections, which have bolstered lending activities and profitability.

However, the banking sector is preparing for tighter liquidity conditions as these state funds are set to mature in October 2026. The industry also faces rising interest margin pressures amid ongoing macroeconomic challenges. Loan growth is expected to moderate as individual savings rates slow down.

Bank Mandiri exemplifies the trend of benefiting from government support, but the overall sector anticipates a shift in liquidity dynamics once the state funds expire.

Sources