Bank Negara Indonesia profitability to hover at 1.8% to 1.9% in 2025

Credit costs are expected to remain modest at the current 1.3% level.

Bank Negara Indonesia (Persero) is expected to report a profitability or return of assets at around 1.8% to 1.9% in 2025, according to estimates by Moody’s Ratings.

The Indonesia-based bank is expected to maintain robust capitalization, and stable funding structures, thanks to its position as a leading transaction bank with strong access to government-related deposits.

Credit costs are expected to remain modest at the current 1.3% level.

Capitalization, measured by tangible common equity to risk-weighted assets, will remain “robust” at around 17%-18% as internal capital generation keeps pace with its growth.

“We expect the bank's liquidity to remain tight, but the liquidity coverage ratio (LCR) will continue to be well above regulatory minimum,” Moody’s said.

Its problem loans are expected to remain around 3%, although its loans at risk ratio will remain higher than the majority of its domestic-related peers due to its exposure to financially vulnerable state-owned enterprises.

Net interest margins will decline marginally due to tight liquidity and expensive funding, Moody’s said.