Bank Jakarta Prioritizes Quality Growth Amid Rising Interest Rates

JAKARTA – Bank Jakarta has adopted a strategy focused on healthy, high-quality growth amid increasing pressure on the cost of funds and the increasingly challenging dynamics of the financial industry.

Bank Jakarta President Director Agus H. Widodo said the bank will not pursue aggressive growth in the face of constantly changing market conditions. Instead, Bank Jakarta will take a more selective approach to business expansion by prioritizing asset quality and sustainable growth.

"We're not racing to achieve the biggest growth. What we're pursuing is healthy, high-quality growth," Agus said.

According to him, the banking industry is currently facing new challenges that differ from those of previous years. In addition to global economic uncertainty, banks are now dealing with rising funding costs that could put pressure on industry performance.

Agus revealed that deposit interest rates in funding auctions had reached as high as 11.5 percent. This serves as a signal of increasing funding costs that the banking industry must anticipate.

"This is already a warning for the banking industry. It means banks' cost of funds will increase significantly going forward," he said.

Nevertheless, Agus emphasized that higher funding costs will not hinder Bank Jakarta's expansion plans. The bank continues to prepare various strategies to maintain business growth while preserving the quality of its portfolio.

One of these strategies is to diversify funding sources, including optimizing low-cost funds generated from the Jakarta Provincial Government ecosystem.

Banking Fundamentals Remain Strong

Despite these challenges, Agus believes that the fundamentals of Indonesia's banking industry remain strong.

This is reflected in continued positive credit growth, strong capital levels, healthy liquidity, and a well-controlled non-performing loan (NPL) ratio.

"The real issue is not the fundamentals—the playing field has changed," he said.

According to Agus, the financial industry has experienced a series of unpredictable events over the past several years, ranging from the pandemic and global geopolitical conflicts to changes in international trade policies that have affected financial markets.

To address these challenges, Bank Jakarta continues to implement transformation across all business lines, including business transformation, digitalization, stronger risk management, and the development of a new corporate culture.

Agus added that changing customer behavior has also become a key driver of transformation in the banking industry. Today, customers no longer evaluate banks solely based on their products, but also on the convenience, speed, security, and comprehensiveness of the services and ecosystem they provide.

"People no longer judge a bank by its products alone, but by how easy, affordable, fast, secure, and comprehensive its services and ecosystem are," he said.

Through its selective growth strategy and ongoing transformation initiatives, Bank Jakarta remains confident that it can maintain healthy growth while strengthening its competitiveness amid the increasingly dynamic financial industry landscape.

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