TheJakartaPost
Please Update your browser
Your browser is out of date, and may not be compatible with our website. A list of the most popular web browsers can be found below.
Just click on the icons to get to the download page.
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search results
Popular Reads
Top Results
No results found. Please check your search term and try again
Can't find what you're looking for?
View all search resultsBanks expected to see lower profits amid weakening rupiah, rate hikes
Due to elevated funding costs, sustained NIM pressure and higher provisions, Samuel Sekuritas has lowered its 2026 earnings growth forecast for banks from 4.6 percent in its previous report to 1.8 percent.
Change text size
Gift Premium Articles
to Anyone
Share the best of The Jakarta Post with friends, family, or colleagues. As a subscriber, you can gift 3 to 5 articles each month that anyone can read—no subscription needed!
On the rise: High-rise buildings in the Sudirman Central Business District (SCBD) in South Jakarta are illuminated by the sunset on Aug. 2, 2024. (Reuters/Ajeng Dinar Ulfiana)
I
ndonesia’s banking sector is projected to see a decline in profits amid a depreciating rupiah and rising key interest rates, according to the latest research report published by local brokerage firm Samuel Sekuritas.
The rupiah dropped to its lowest level at Rp 18,178 per United States dollar on June 8, marking a 9 percent decline since the beginning of the year.
To defend the currency, Bank Indonesia (BI) has raised its benchmark interest rate twice, by 50 basis points (bps) in May and another 25 bps in a surprise move on June 9.
Read also: BI hikes rate in surprising move, rupiah gains
In the research report published on Friday, Samuel Sekuritas noted that higher rates and a weaker currency could pressure banks with a potential increase in cost of funds, particularly for names reliant on expensive time deposits, and a narrower net interest margin (NIM), as well as deteriorating asset quality as borrowers experienced lower spending power.
“Weaker rupiah currency also feeds into imported inflation, reinforcing higher-for-longer rate stance and prolonging margin squeeze,” reads the report.
Due to elevated funding costs, sustained NIM pressure and higher provisions, Samuel Sekuritas has lowered its 2026 earnings growth forecast for banks from
