S&P Global Ratings says that three of Indonesia’s four major banks—Bank Mandiri, Bank Rakyat Indonesia, and Bank Negara Indonesia—now carry a stable outlook as credit risks ease.
The ratings agency reported that these banks, along with the broader Indonesian banking sector, have achieved “substantial and sustained improvements in weak loans.” In a press release dated December 9, 2025, S&P noted that the industry’s strong post-pandemic rebound and Indonesia’s solid economic prospects have contributed to lower credit risk.
The ratio of loans at risk has improved significantly, falling to 9.7% by June 2025 from a high of 23.4% in 2020. This category includes non-performing loans, special-mention loans, and restructured exposures.
Still, S&P pointed to lingering stress in segments such as consumer lending and microfinance, reflecting slower recoveries in certain parts of the economy. It said banks should be able to absorb these risks thanks to strong pre-provision earnings and healthy coverage ratios.
The agency also highlighted vulnerabilities linked to geopolitical tensions and the financial fragility of lower- and middle-income households. It cited uneven economic growth and pressures in sectors like textiles—an industry facing prolonged decline due to weakening competitiveness—as additional areas of concern.
Indonesia’s economy is expected to expand by around 5% over the next two to three years. S&P said that despite a more uncertain external environment, exports remain resilient and domestic demand could strengthen with lower interest rates and government social-support programs.
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