Liquidity in 2025 Still Challenging, Banks Strategize

JAKARTA, KOMPAS – The banking industry prospects are still overshadowed by liquidity challenges that have the potential to pressure credit distribution. In addressing these challenges, banks are preparing by focusing on maintaining low-cost funds, optimizing digital channels, and distributing credit cautiously.

President Director of PT Bank Mandiri (Persero) Tbk Darmawan Junaidi stated that Indonesia's economic growth in 2025 is expected to accelerate in line with the reduction of the benchmark interest rate at the beginning of the year. However, most banks face challenges related to the collection of third-party funds (DPK).

"The growth of public funds nationally lags behind credit growth and puts pressure on the credit-to-funding ratio of banking. However, this challenge is not an obstacle for Bank Mandiri to optimally support national economic growth," he said in a virtual press conference on the Presentation of Bank Mandiri's Performance 2024, on Wednesday (5/2/2025).

Throughout 2024, the growth of national banking industry credit was recorded at 10.4 percent year-on-year, while third-party funds (DPK) only grew by 4.48 percent year-on-year. This means there is a gap of about 6 percent between the growth of credit and the growth of third-party funds in the banking industry.

In the midst of this situation, Bank Mandiri in December 2024 was recorded to have distributed credit of Rp1,310 trillion or grew 20.7 percent annually. Meanwhile, the credit quality reflected in the non-performing loan (NPL) ratio in 2024 remained under control at 0.97 percent, down 5 basis points (bps) from last year.

In the same period, Bank Mandiri recorded DPK of Rp1,619 trillion or grew 7.73 percent annually. This growth was mainly supported by low-cost funds (Current Account Savings Account/CASA) which reached Rp1,217 trillion or 80.3 percent of total DPK.

Liquidity challenges will continue to occur in the future, but we are optimistic that the growth of our third-party funds can still support liquidity needs to sustain business expansion requirements.

The Director of Finance and Strategy at Bank Mandiri, Sigit Prastowo, added that tight liquidity and the projected decrease in benchmark interest rates will be challenges for the banking industry in 2025. Nevertheless, Bank Mandiri remains optimistic about being able to face these challenges by maintaining the company's profitability stability.

"Liquidity challenges will continue to occur in the future, but we are optimistic that the growth of our third-party funds can still support liquidity needs to sustain business expansion needs," he said.

Despite this, Bank Mandiri will continue to monitor liquidity conditions and adjust funding strategies tactically. There are several non-deposit funding options that can be undertaken, such as bilateral transactions and the issuance of debt securities.

In addition, Bank Mandiri will also optimize low-cost transactional funds by encouraging customer transactions, both wholesale and retail. This is done to keep the cost of funds low, both through ecosystem-based growth strategies and optimization of digital platforms, such as Livin' by Mandiri and Kopra by Mandiri.

By the end of 2024, the number of Livin' by Mandiri users has reached 29.3 million with a transaction frequency reaching 3.9 billion transactions or growing 38 percent annually. Meanwhile, Kopra by Mandiri has managed transactions worth IDR 22,700 trillion or growing by 17 percent annually with a frequency reaching 1.3 billion transactions or increasing 21 percent annually.

Meanwhile, credit growth will continue to be encouraged, both wholesale and retail segments by prioritizing the principle of prudence. Several sectors that will be prioritized for credit growth include the food and beverage industry, health services, telecommunications, and energy.

In line with the optimization of the business ecosystem and strengthening of digital strategies, Bank Mandiri recorded a consolidated net profit of IDR 55.8 trillion at the end of 2024. This achievement increased by 1.31 percent compared to last year which was IDR 55.1 trillion.

On the other hand, President Director of PT Krom Bank Indonesia Tbk, Anton Hermawan said, tightening liquidity due to declining purchasing power in 2024 also became a challenge for digital banking. The minimal increase in wages and the price of goods that remained high caused customers to withdraw savings, resulting in a decrease in DPK and a slowdown in credit growth.

To face these challenges, digital banking needs to innovate, such as presenting technology-based loan products that facilitate credit access and offer deposits according to customer needs. Furthermore, the policy of lowering the benchmark interest rate also provides an opportunity for digital banks to increase credit demand.

"Although the digital banking industry shows bright prospects in 2025, we realize that various challenges need to be anticipated. Armed with the resilience that has been built throughout 2024, we are optimistic that we can maintain sustainability by continuing to strengthen product diversification and service innovation," he said in a press release.

It is necessary to be aware of the risks arising from global uncertainty, such as the slowing of global interest rate declines along with the tendency for increasing inflation rates, increasing financial market volatility and fluctuations in global trade and commodity prices caused by the 'Trump Effect', as well as ongoing geopolitical tensions.

In addition, competitive deposit interest rates are also a challenge for digital banks in 2025. Although high interest rates are effective in attracting customers, this step can burden the bank's financial structure if carried out without a sustainable strategy.

In facing this situation, digital banks need to combine attractive interest rates with value-added product and service innovations. Product diversification is a key strategy to maintain competitiveness without creating long-term liquidity risks.

Anton added that strengthening liquidity, prudent credit distribution, and developing innovative financial products are key to maintaining competitiveness amidst the dynamic digital banking landscape. In addition, risk management and asset diversification also need to be carried out to maintain financial resilience amidst global uncertainty.

"With the right strategy, disciplined risk management, and continuous innovation, Krom Bank can continue to provide added value to customers while strengthening our position in the digital banking industry by 2025," he said.

Previously, the Chief Executive of Banking Supervision of the Financial Services Authority (OJK) Dian Ediana Rae assessed that banking credit growth in 2025 would still be on a positive trend. This is in line with the projection of Indonesia's economic growth which will still be quite good, so that it can attract investment interest and bring in domestic funds.

In addition, the projection of a decrease in domestic interest rates in 2025 is also expected to have a positive impact on reducing the cost of funds, but still attractive for customers to save their funds in banks. Thus, DPK can increase and liquidity is maintained, so that it can become the main source of funds in implementing bank credit distribution.

"However, we need to be aware of the risks arising from global uncertainty, such as the slowing down of global interest rate declines along with the tendency for increasing inflation rates, increasing financial market volatility and fluctuations in global trade and commodity prices caused by the 'Trump Effect', as well as ongoing geopolitical tensions," said Dian in a written statement, Friday (24/1/2025).