Indonesian banks are expected to see loan growth cool in the second half of 2026 due to tightening liquidity, following a strong performance in the first half, according to Maybank IBG Research. Analysts Jeffrosenberg Chenlim and Faiq Asad project overall industry loan growth to settle between 8% and 10% for full-year 2026. Central bank data showed system loan growth accelerated to 12.6% year-on-year in June 2026, up from 11.5% in May, primarily propelled by the construction, utilities, and manufacturing sectors, while growth across other segments remained subdued.

Sector performance varied across retail lending, with auto loans shrinking by 8.7% in June, while mortgages and multipurpose loans held steady. Overall asset quality remained controlled, with the system non-performing loan ratio rising slightly to 2.17% in May 2026 from 2.14% in January. However, researchers highlighted localized pressure within consumer and MSME portfolios, attributing the softening to reduced purchasing power among lower- and middle-income segments. Despite the strong mid-year momentum, Maybank IBG maintains that tightening liquidity constraints will curb credit expansion through the end of the year.

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