Indonesian Banks Brace for Tighter Liquidity Amid Slowing Savings Despite Strong First-Half Growth

Finance

Loan expansion expected to ease as household savings decline

Bank Mandiri, one of Indonesia’s state-owned banks, has seen strong loan and profit growth driven by government liquidity support. As these state funds mature in October, the broader banking sector is preparing for tighter liquidity. (Photo by Ken Kobayashi)

ISMI DAMAYANTI

August 12, 2026 12:21 JST

JAKARTA — Indonesian banks, including major state-owned institutions and emerging digital lenders, reported strong loan and profit growth during the first half of 2026. However, the sector now faces increasing liquidity constraints and narrowing interest margins amid ongoing macroeconomic headwinds.

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