Indonesian banks reap returns from IT investments

Bank Mandiri’s digital fee income grew by double digits.

Indonesian banks are beginning to reap the benefits of their IT investment, with some banks reporting double digital fee income growth.

Bank Central Asia, for example, is repealing the benefits of its IT investment. It now has the lowest cost-to-income ratio in the banking industry and the highest current account and savings account (CASA) ratio, according to a report by UOB Kay Hian (UOBKH) analyst Posmarito Pakpahan.

Bank Mandiri, meanwhile, has seen its funding structure improve, whilst its CASA ratio is the second highest amongst the Big Four banks. Its digital fee income also grew by double digits, according to UOBKH.

Separately, both Bank Central Asia and Bank mandiri have the best asset quality amongst their peers, thanks to their manageable write-offs and net new nonperforming loan (NPL) formation, it said.

Both Bank Rakyat Indonesia (BRI) and Bank Negara Indonesia (BNI) are in the process of enhancing their deposit franchise.

IT operation expenses remain elevated in Q1 2025 for the banking industry.

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