Indonesian banks won’t be hit by export-related woes

Their exposure to export-oriented companies is small at 2.5%.

Indonesian banks are resilient to any tariff-related disruptions affecting the Asia Pacific, according to S&P.

Apart from Indonesia’s economy not being heavily reliant on experts, its banks have one of the region’s strongest regulatory capital levels.

The banking sector's exposure to export-oriented companies is small at 2.5%.

Indonesia’s top 10 biggest banks have strong capital positions and high profitability, which is expected to provide a buffer against unexpected risks.

"Indonesia's reliance on exports to the U.S. is low. This limits direct hits from rising U.S. tariffs on key sectors the banks lend to," said S&P Global Ratings credit analyst Nikita Anand.

But S&P does expect some indirect impacts of the global tariff situation on Indonesia that could weaken business conditions and raise downside risks for credit losses, said S&P Global Ratings credit analyst Geeta Chugh.

"This includes currency volatility, weaker capacity utilization for some sectors, and reduced household spending amid uncertainty,” Chugh said.