Introduction

Indonesia’s banking sector has continued its growth in FY-24, demonstrating resilience amid evolving economic conditions. The industry witnessed strong revenue and profitability growth, supported by expanding loan portfolios, higher net interest income, and an uptick in fee-based earnings. These trends occurred despite macroeconomic challenges, including fluctuations in Bank Indonesia’s benchmark interest rates, inflationary pressures, and regulatory changes. As banks navigate these complexities, their ability to maintain efficiency and asset quality has been crucial in sustaining profitability. This blog explores the financial performance of Indonesia's top banks, analyzing key trends in revenue, profitability, fee income, asset quality, and operational efficiency.

Growth Opportunities for Indonesia’s Banking Sector in FY-2025

• Expansion of embedded finance: Embedded finance in Indonesia is evolving with key developments in multi-currency wallets, enabling real-time currency conversion and local payment methods. Additionally, embedded risk management tools, such as automated foreign exchange hedging and predictive analytics, are gaining traction. This market is expected to grow from US$2.59 billion in 2024 to US$10.54 billion by 2029¹. Indonesian banks can capitalize on this to enhance their offerings by integrating multi-currency wallets and real-time currency conversion into their digital platforms. This will make cross-border transactions seamless for both individuals and businesses.

• AI integration: By adopting AI solutions, banks can improve customer experiences, streamline operations, and enhance security. For example, Bank Rakyat Indonesia (BRI) has introduced "Sabrina," an AI chatbot that provides transparent financial information, making banking services more accessible and efficient. Similarly, Bank Danamon has integrated SAP Business AI solutions, including the generative AI copilot Joule, into its HR processes to enhance efficiency. These improvements help banks optimize their processes, reach more customers, and support long-term growth.

• Cost optimisation through digitalisation: The adoption of AI and big data analytics enables the automation of routine tasks, enhances decision-making, and delivers personalized customer services. For example, Bank Central Asia (BCA) implemented an AI-driven chatbot to handle customer inquiries, leading to an increase in customer self-service interactions and reducing the need for direct human intervention. As AI adoption accelerates, Indonesia is positioned to generate an estimated US$366 billion in economic value from AI by 2030², highlighting the pivotal role of AI and big data in modernizing banking services in Indonesia.

The following is a detailed analysis of key financial metrics of Indonesia’s top banks in FY-24 ‍

Revenue analysis

Indonesia's leading banks demonstrated strength and steady growth in FY-24, with overall net revenues increasing by 6.69% YoY, from USD 47.43 billion in FY-23 to USD 50.6 billion in FY-24.

Exhibit 1: Net revenue of top Indonesian banks  

Bank BTPN

Bank BTPN achieved an impressive 18.58% YoY increase in net revenue, rising from USD 346.1 million in FY-23 to USD 410.4 million in FY-24. This growth was primarily driven by a 26.27% increase in net interest and sharia income, which rose from USD 1.2 billion in FY-23 to USD 1.5 billion in FY-24.

Profitability analysis

Indonesia's top banks recorded a 5.1% YoY increase in net profits, rising from USD 18.4 billion in FY-23 to USD 19.3 billion in FY-24.

Exhibit 2: Net Profit of top Indonesia banks  

Bank BTPN

Bank BTPN demonstrated strong profitability, with net profit increasing by 20% YoY, rising from USD 268.2 million in FY-23 to USD 321.6 million in FY-24. This growth was supported by a 104% YoY increase in non-operating income, increasing from USD 1 million to USD 2.1 million, and a 70% reduction in non-operating expenses, which declined from USD 1.3 million to USD 0.4 million.

Bank Danamon

Bank Danamon experienced a 9.28% decline in net profit, dropping from USD 350.4 million in FY-23 to USD 320 million in FY-24. This decline was driven by a 6.11% increase in operating expenses, which rose from USD 995.7 million to USD 1.06 billion, and a 19.47% increase in credit costs, which climbed from USD 368.7 million to USD 440.5 million.

Fee-based income analysis

Fee income across Indonesia’s leading banks saw a robust 12.62% YoY increase, rising from USD 7.5 billion in FY-23 to USD 8.4 billion in FY-24.

Exhibit 3: Fee incomes of the top banks in Indonesia

Bank BTPN

Bank BTPN recorded a notable 101.3% YoY increase in fee income, rising from USD 94.2 million in FY-23 to USD 190 million in FY-24. This growth was fueled by a 59.1% rise in loan commission income, increasing from USD 28 million to USD 44.5 million, and a 144% rise in bancassurance and investment product commission income from USD 15 million to USD 36.6 million.

Non-performing loans (NPL)

The average non-performing loan (NPL) ratio across Indonesia’s leading banks declined by 15 basis points (bps), from 2.1% in FY-23 to 1.95% in FY-24.

Exhibit 4: NPL of top banks in Indonesia

Bank Danamon

Bank Danamon reported a 13.6% YoY decline in its NPL ratio, decreasing from 2.2% in FY-23 to 1.9% in FY-24. This improvement was driven by an 8.78% expansion in its total loan portfolio, which grew from USD 14.39 billion to USD 15.62 billion.

Cost Efficiency  

The average cost-efficiency ratio across Indonesia’s leading banks increased slightly by 19 bps, from 41.65% in FY-23 to 41.84% in FY-24.

Exhibit 5: CE of top banks in Indonesia

Bank Central Asia

Bank Central Asia reported a 7.62% YoY decline in its cost-to-income ratio, falling from 34.1% in FY-23 to 31.5% in FY-24. This improvement was driven by a 2.48% reduction in other expenses, from USD 1.9 billion to USD 1.8 billion, and an 8.6% increase in interest income, rising from USD 8.7 billion to USD 9.5 billion.

Bank Negara Indonesia

Bank Negara Indonesia however, recorded a 3.96% YoY increase in its cost-to-income ratio, rising from 42.9% in FY-23 to 44.6% in FY-24. This was primarily due to a 6.88% rise in operating expenses, which increased from USD 2.7 billion to USD 3 billion.

¹Indonesia Embedded Finance Business Report 2024: Market to grow by 40.8% to Reach $2.59 Billion this Year - Forecasts to 2029

² Indonesia: Embracing AI to Maximise Economic Potential – OpenGov Asia

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