Indonesian banks posted resilient year-to-date net profit growth in 2026, bolstered by an increasing share of government funds in bank funding profiles, according to research from UOB Kay Hian (UOBKH). During the first seven months of the year, Bank Central Asia (BCA) and state-owned Bank Mandiri recorded net profit increases of 5% and 19.9% year-on-year, respectively.

Operational trends diverged significantly between public and private institutions. Bank Mandiri logged a 19.5% surge in loan growth, substantially outpacing its 6.6% current account savings account (CASA) growth. Conversely, BCA’s loan growth expanded at a slower 8.4% rate compared to its 10.9% CASA growth. UOBKH analyst Posmarito Pakpahan noted that this divide highlights the gap between policy-supported balance sheet expansion at state-owned enterprises (SOEs) and organically funded growth at private players like BCA.

Liquidity across the Indonesian banking sector is increasingly split between organic private-sector deposits and government-backed injections, including public placements and Bank Indonesia incentives. Pakpahan emphasized that this structural distinction impacts long-term margins, as organic CASA remains fundamentally cheaper and stickier than public funds or time deposits.

While state liquidity provides temporary relief to SOE banks, repeated injections underscore an underlying funding mismatch where corporate, infrastructure, and policy lending outpace organic deposit accumulation. By May 2026, the loan-to-deposit ratio (LDR) across Indonesia’s top five SOE banks reached 91%—exceeding the 88.3% industry average—with Bank Mandiri’s LDR hitting 94.8% in July. Moving forward, the key factor for sector stability will be whether robust corporate and investment lending can stimulate broader economic activity to generate organic deposit growth and close the credit-funding gap.

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