Their involvement with export-focused businesses is minimal at just 2.5%.
Indonesian banks
are immune to any tariff-induced disruptions impacting the Asia-Pacific region, as stated by S&P.
Aside from Indonesia’s economy not depending significantly on expertise, the country’s banking sector boasts some of the highest regulatory capital levels in the region.
The banking sector has limited involvement with export-focused firms, amounting to just 2.5% of their portfolio.
The ten largest banks in Indonesia boast robust capital positions along with significant profitability, anticipated to offer protection against unforeseen risks.
S&P Global Ratings credit analyst Nikita Anand stated that Indonesia’s dependence on exports to the United States is minimal, which reduces the immediate impact of escalating U.S. tariffs on crucial sectors these banks finance.
But S&P does expect some indirect impacts of the global tariff situation on Indonesia that could weaken business conditions and raise downside risks for credit losses, said S&P Global Ratings credit analyst Geeta Chugh.
“This encompasses currency fluctuations, diminished capacity usage in certain industries, and decreased household expenditure due to uncertainties,” stated Chugh.
