Moody’s Cuts Outlook on Five Big-Cap Indonesian Banks Over Policy Credibility Risks

JAKARTA, Investortrust.id — Moody’s Ratings cuts the outlook on five big-cap Indonesian banks to negative on Friday, Feb 6, 2026 in Jakarta after revising Indonesia’s sovereign outlook to negative while maintaining the sovereign rating at Baa2, a move expected to raise sensitivity across the banking sector.

The banks affected are PT Bank Mandiri (Persero) Tbk or BMRI, PT Bank Rakyat Indonesia (Persero) Tbk or BBRI, PT Bank Negara Indonesia (Persero) Tbk or BBNI, PT Bank Central Asia Tbk or BBCA, and PT Bank Tabungan Negara (Persero) Tbk or BBTN.

For all five banks, Moody’s maintains their key credit ratings, including issuer ratings, deposit ratings, senior unsecured debt, Counterparty Risk Ratings, Counterparty Risk Assessments, Baseline Credit Assessments, and Adjusted BCAs.

Several subordinated instruments and medium-term note programs issued by BMRI and BBNI are also affirmed at their current levels.

In a statement released on Friday, the main reason for the outlook change is rising risks to Indonesia’s policy credibility, reflected in weaker consistency, predictability, and effectiveness of policy communication over the past year.

If prolonged, these conditions could erode the foundations of macroeconomic, fiscal, and financial-sector stability that have supported Indonesia’s growth.

The sovereign rating is maintained due to Indonesia’s structural economic resilience, including its natural resource base and favorable demographics.

Moody’s warns that any downgrade of Indonesia’s sovereign rating would directly affect the ratings of the five banks.

For BMRI, BBRI, and BBCA, a sovereign downgrade would lower their BCAs and Adjusted BCAs, while for BBNI and BBTN the impact would stem from reduced government support.

In addition, the Counterparty Risk Ratings and Assessments of BMRI, BBRI, BBCA, and BBTN would also be downgraded if the sovereign rating is cut.

For BMRI, the ratings reflect solid capitalization, funding, and profitability, but are constrained by potential capital buffer erosion, asset-quality pressure, and high exposure to commodities and higher-risk sectors.

Profitability is expected to remain moderate in 2026, with capital ratios trending lower due to high dividend payouts and risk-weighted asset growth.

BBRI is assessed as having very strong profitability, capitalization, and funding, although asset risks remain elevated due to large exposure to the MSME segment.

Profitability is expected to decline in 2026 amid margin pressure and higher credit costs, while liquidity and funding are projected to remain solid with only limited increases in market funding reliance.

For BBNI, the ratings reflect strong capitalization and stable funding, but relatively weaker profitability compared with peers.

Risks stem from restructured loan portfolios and exposure to vulnerable state-owned enterprises, although asset quality is expected to remain broadly stable.

BBCA is viewed as having very strong asset quality and profitability, supported by its dominance in transaction banking.

However, it still faces risks from rapid credit growth in corporate and SME segments.

BTN faces higher asset risks, marked by elevated restructured loans, relatively low provisioning, and limited profit and capital buffers.

Nonetheless, BTN benefits from very strong government support reflecting its systemic role and housing policy mandate, resulting in significant rating uplift.

As long as the sovereign outlook remains negative, upside potential for bank ratings is limited, although outlooks could return to stable if Indonesia’s sovereign rating and outlook improve.