Indonesia Banks: Off the Trough, Still No Catalyst

Research evidence excerpt

Indonesia Banks: Off the Trough, Still No Catalyst

Idea

July 19, 2026 05:09 PM GMT

Morgan Stanley Asia (Singapore) Pte.+MASEAN Financials | Asia Pacific Selvie Jusman, CFA

Equity Analyst

Indonesia Banks: Off the Selvie.Jusman@morganstanley.comNick Lord +65 6834-6517

Nick.Lord@morganstanley.com +65 6834-6746

Trough, Still No Catalyst Aitong Li

Research Associate

Aitong.Li@morganstanley.com +65 6834-6295

We stay cautious into 2Q26 results. Market rotation and IDR

stabilization have helped the group rebound from the recent

trough but tight liquidity, elevated funding costs and subdued

loan growth remain headwinds. Absent a clear catalyst, we see

little room for sustained re-rating. Still prefer BBCA. ASEAN Financials

Asia Pacific

We remain cautious on Indonesian banks into 2Q26 results season: As highlighted Industry View In-Line

in Indonesia – Economics, Macro & Equity Strategy: Value Re-established but Stay

Underweight for Now (18 June 2026), policy uncertainty and a challenging macro

backdrop are likely to continue weighing on confidence, keeping the investment

cycle subdued and potentially spilling over into employment creation and private

consumption.

Indonesian banks are set to begin reporting 2Q26 results – we expect another

muted quarter: The schedule is BMRI (23 July), BBCA (28 July), BBNI (5 August), and

BBRI (late August/September). Liquidity conditions and loan growth are likely to

remain the key investor discussion points. See the following section – 2Q26

preview .

Tight system liquidity and ongoing uncertainty surrounding government fund

placements continue to weigh on the SOE banks: Recent decisions to return

government funds to SoE banks should provide some relief, but we expect liquidity