Top Banks in Indonesia

Indonesia's Banks

This is the list of the largest banks in Indonesia, as measured by total assets. Marcopolis.net compiles the ranking of Indonesia's largest banks for 2016. Following are the largest banks in Indonesia by assets. PT. Bank Mandiri Tbk is currently the largest bank in Indonesiai by assets, followed by PT. Bank Rakyat Indonesia Tbk, which is the second largest bank in Indonesia.

There are over 120 commercial banks in Indonesia (4 of them being state owned banks). Two of the state owned banks have Islamic banking units and there are five Islamic commercial banks

Indonesian banks have faced many challenges in the last years. Weak volatility in the global market has led to a reduced demand for loans. Therefore banks need to focus on improving asset quality and not on boosting loan growth and profitability. Focusing on sectors related to government projects such as infrastructure could be the answer for most Indonesian banks.

Bank Indonesia targets loan to grow 12 percent in 2016, expecting consumption demand to recover in the second half of 2016. To support economic growth BI has loosened monetary policy since the start of this year, among other things BI cut the policy rate by 125 basis points (bps) from 7.75 percent to 6.50 percent from January to June.

These challenging conditions have forced banks to operate more efficiently by pushing down their overhead costs. If banks can operate more efficiently, they will be able to improve their profitability. Furthermore, banks need to improve their standard procedures in disbursing loans to stop the NPL ratios increasing any further. Still, the Indonesian banking sector still has plenty of room to grow.

According to Bank Indonesia, the country’s central bank, Indonesia is home to the world’s largest retail Islamic banking market, with 17.3 million customers, 2,990 bank offices, 1,267 Shariah-compliant products and 43,000 employees as of 2013.

Indonesia’s banking system is the 12th-largest in the Asia-Pacific region, with total bank assets of US$444.21 billion at the end of February 2015, based on estimates by The Economist Intelligence Unit Ltd. The country’s bank assets represent about 40% of its nominal GDP, a low level compared to its regional peers. The Philippines holds bank assets equivalent to about 80% of its nominal GDP, while in Malaysia holds up to 250%.

However according the Indonesian Financial Services Authority, the country’s commercial and regional banks have grown considerably over the past six years, with their aggregate assets amounting to 5.705 quadrillion rupiah, compared to 2.343 quadrillion rupiah in 2008.

The List of Top Banks in Indonesi