Due to elevated funding costs, sustained NIM pressure and higher provisions, Samuel Sekuritas has lowered its 2026 earnings growth forecast for banks from 4.6 percent in its previous report to 1.8 percent.
On the rise: High-rise buildings in the Sudirman Central Business District (SCBD) in South Jakarta are illuminated by the sunset on Aug. 2, 2024. (Reuters/Ajeng Dinar Ulfiana)
Indonesia’s banking sector is projected to see a decline in profits amid a depreciating rupiah and rising key interest rates, according to the latest research report published by local brokerage firm Samuel Sekuritas.The rupiah dropped to its lowest level at Rp 18,178 per United States dollar on June 8, marking a 9 percent decline since the beginning of the year.
To defend the currency, Bank Indonesia (BI) has raised its benchmark interest rate twice, by 50 basis points (bps) in May and another 25 bps in a surprise move on June 9.
Read also: BI hikes rate in surprising move, rupiah gains
