The Indonesian banking sector continued to exhibit strong performance in October 2024, supported by solid credit growth and robust risk management. Credit grew by 10.92% year-over-year (YoY), reaching IDR 7,656.90 trillion, a slight increase from 10.85% YoY in September 2024.

Investment loans saw the highest growth at 13.63%, followed by consumption loans at 11.01%, and working capital loans at 9.25%. State-owned banks were key contributors, posting a credit growth of 12.64% YoY. Corporate loans grew by 16.08%, while loans to micro, small, and medium enterprises (MSMEs) expanded by 4.76%.

Deposits (Third Party Funds) also rose, increasing by 6.74% YoY to IDR 8,751.16 trillion. Among deposit types, current accounts grew by 6.72%, savings by 7.43%, and time deposits by 6.18%.

Liquidity in the banking sector remained stable, with Liquid Asset to Non-Core Deposit (AL/NCD) and Liquid Asset to Third Party Funds (AL/DPK) ratios at 113.64% and 25.58%, respectively, well above the regulatory thresholds of 50% and 10%. The Liquidity Coverage Ratio (LCR) stood at 222.70% and the Net Stable Funding Ratio (NSFR) at 129.50%, reflecting the sector's ability to handle short-term and long-term liquidity needs.

Credit quality was largely preserved, with the gross Non-Performing Loan (NPL) ratio at 2.20% and the net NPL ratio at 0.77%. Loan at Risk (LaR) dropped to 9.94%, nearing pre-pandemic levels of 9.93% in December 2019.

Profitability indicators also showcased the resilience of the banking sector. The Return on Assets (ROA) was stable at 2.73%, signaling sustained efficiency and profit generation. Meanwhile, the Capital Adequacy Ratio (CAR) increased to 27.07%, providing a robust buffer against potential risks amid global economic uncertainty.

Buy Now Pay Later (BNPL) products, though still a small portion of total credit at 0.28%, saw significant growth. Outstanding BNPL loans rose 47.92% YoY, reaching IDR 21.25 trillion in October 2024. The number of BNPL accounts also climbed to 23.27 million, up from 19.82 million in September 2024.

Additionally, the Financial Services Authority (OJK) intensified efforts to combat online gambling, which poses risks to the economy and financial systems. As part of its role in the task force established under Presidential Decree No. 21/2024, OJK has blocked approximately 8,000 bank accounts linked to illegal gambling activities. Banks have been urged to enhance their due diligence processes, especially for dormant accounts and those tied to government assistance programs, to prevent misuse.