The Financial Services Authority (Otoritas Jasa Keuangan/OJK) continues to strengthen the stability of the financial services sector to support the government’s priority programs and drive national economic growth. OJK remains optimistic about the sector’s performance in 2025, despite existing challenges and opportunities.

"We are optimistic that the financial services sector will continue to grow in 2025," said OJK Board of Commissioners Chairman Mahendra Siregar at the 2025 Annual Financial Services Industry Meeting (PTIJK) in Jakarta. The event was attended by hundreds of financial industry players and key government officials.

During the PTIJK, OJK presented its annual report on financial regulation and supervision. Additionally, the agency introduced the Indonesia Anti-Scam Center, a new initiative aimed at tackling financial fraud, and the Financial Sector Actors Information System (Sipelaku), which enhances sector integrity and consumer protection.

Mahendra outlined four priority policies for 2025 to ensure the resilience of the financial services sector and its continued contribution to economic growth.

Banking sector performance showed positive growth with stable risk profiles. As of December 2024, credit growth reached 10.39% year-on-year (YoY), totaling IDR 7,827 trillion. Investment credit saw the highest growth at 13.62%, followed by consumption credit at 10.61%, and working capital credit at 8.35%. State-owned banks were the primary drivers of this growth, recording a 12.10% YoY increase, while corporate credit expanded by 15.67% and MSME credit by 3.37%.

Third-party funds (DPK) in banking grew by 4.48% YoY to IDR 8,837.2 trillion, with demand deposits, savings, and time deposits rising by 3.34%, 6.78%, and 3.50% YoY, respectively. The growth in 2024 was higher than the 3.73% YoY recorded in 2023.

Banking liquidity remained sufficient, with the Liquid Assets/Non-Core Deposit (AL/NCD) ratio at 112.87% and the Liquid Assets/Third-Party Funds (AL/DPK) ratio at 25.59%, both exceeding their respective thresholds of 50% and 10%. The Liquidity Coverage Ratio (LCR) stood at 213.23%.

Credit quality remained stable, with the gross Non-Performing Loan (NPL) ratio at 2.08% and the net NPL ratio at 0.74%. Loan at Risk (LaR) declined to 9.28%, lower than pre-pandemic levels recorded in December 2019 at 9.93%.

The profitability of banks, as measured by Return on Assets (ROA), remained steady at 2.69%, indicating the sector’s resilience. Capital Adequacy Ratio (CAR) stood at 26.69%, providing a strong buffer against economic uncertainties.

The Buy Now, Pay Later (BNPL) segment accounted for 0.28% of banking credit, with significant annual growth. As of December 2024, outstanding BNPL credit increased by 43.76% YoY to IDR 22.12 trillion, with a total of 23.99 million accounts.

In its efforts to combat online gambling, OJK requested banks to block approximately 8,618 accounts linked to illegal activities. The agency also collaborated with financial institutions to enhance fraud detection measures, particularly for dormant accounts.

Throughout 2024, OJK revoked the licenses of 17 rural banks (BPR) and three Islamic rural banks (BPRS). Additionally, two rural banks voluntarily closed at the request of shareholders.

PHOTO: FOREIGNINVESMENTNETWORK

This article was created with AI assistance.