Jakarta. Indonesia’s top banks remain fundamentally sound despite recent negative outlook revisions by global rating agencies, with the Financial Services Authority (OJK) viewing the downgrade as temporary and largely driven by external factors.

OJK’s Chief Banking Supervisor, Dian Ediana Rae, said the regulator respects the methodologies used by rating agencies but stressed that domestic financial stability will be maintained through close policy coordination.

“OJK, together with stakeholders, particularly members of the Financial System Stability Committee (KSSK), will continue to safeguard financial system stability through policy coordination and strengthened supervision to ensure the resilience of the banking sector amid economic dynamics,” Dian said on Wednesday.

He attributed the negative outlook primarily to external pressures, including the shift in Indonesia’s sovereign credit outlook from stable to negative, which has weighed on risk perception across the banking sector. Global agencies such as Moody's and Fitch Ratings made the adjustment not because of weakening bank fundamentals, including those of state-owned lenders grouped under Himbara.

Dian noted that institutional credit ratings typically do not exceed a country’s sovereign rating, meaning any change at the sovereign level will cascade to the financial sector.

Despite the revision, OJK emphasized that banks’ access to funding remains intact. Major lenders in the KBMI 4 category and Himbara continue to hold investment-grade ratings, supported by strong fundamentals. The sector’s funding structure is still dominated by domestic third-party funds, limiting reliance on external financing, while banks have also diversified funding strategies based on cost-benefit considerations.

Indonesia’s banking industry continues to post solid performance. As of January 2026, credit growth stood at 9.96% year-on-year, in line with a 13.48% increase in third-party funds.

Asset quality also remained stable, with the non-performing loan ratio at 2.14%. Capital levels stayed robust, with a capital adequacy ratio of 25.87%.

Liquidity indicators were well above regulatory thresholds, with the AL/NCD ratio at 121.23%, AL/DPK at 27.54%, and the liquidity coverage ratio at 197.92%.

Large banks continued to lead growth, with credit expanding 13.34% among KBMI 4 lenders and 13.43% among Himbara banks. On the funding side, deposits grew 16.32% in KBMI 4 and 16.38% in Himbara, while capital remained solid with CAR at 22.33% and 20.32%, respectively, as of January 2026.