Dana Nasabah Threatened to Move to SBN
Banks Grapple with Liquidity Crunch as State Bonds Lure Investors
Table of Contents
- Banks Grapple with Liquidity Crunch as State Bonds Lure Investors
- Banks vs. Bonds: Why Jakarta Banks Are Battling for Liquidity
- Q&A: Understanding the Liquidity Crunch in Jakarta’s Banking Sector
- Why are Jakarta banks facing increased competition for liquidity?
- What are Surat Berharga Negara (SBNs) and why are they so appealing?
- How is the shift to SBNs affecting banks’ Third-Party Funds (DPK)?
- How are banks like BCA responding to the competition from SBNs?
- What is Bank Raya’s perspective on the liquidity competition?
- How are banks like Bank Oke planning to retain customers amid the SBN surge?
- What are the potential risks for banks if they don’t adapt to the SBN competition?
- Could SBN rates increase further and what impact would that have?
- What macroprudential incentives are available and are they helping?
- Summary: Key Differences Between Bank Deposits and sbns
- Q&A: Understanding the Liquidity Crunch in Jakarta’s Banking Sector
Banks in Jakarta are currently navigating a challenging landscape marked by intense competition for market liquidity. This situation sustains high-interest burdens, even as benchmark interest rates decline.
The Allure of State Bonds (SBN)
Banks face stiff competition from investment instruments offering more attractive returns. A prime example is the Surat Berharga Negara (SBN), or State Bond, which provides higher interest rates compared to traditional bank deposits. This is creating a shift in investment preferences.
SBN Yields Outpace Deposit Rates
As of February 2025, SBN yields for both 2-year and 10-year tenors remain above 6%. In contrast, data from Bank Indonesia (BI) indicates that deposit interest rates for a 2-year tenor hovered around 4% as of January 2025. This disparity is a key factor driving investment decisions.
Decline in Third-Party Funds (DPK)
The banking sector’s Third-Party Funds (DPK) from individual customers have experienced a year-on-year (YoY) decrease of approximately 2.6%. While the exact flow of funds remains unclear, individual ownership of SBNs has surged by 25.79% YoY,reaching Rp 576.92 trillion. This critically important increase underscores the growing appeal of SBNs to individual investors.
Bank Central Asia (BCA) Acknowledges the Competition
Jahja Setiaatmadja, President Director of BCA, acknowledges the competition for liquidity posed by SBNs, noting that while BI’s benchmark interest rate has decreased, SBN interest rates have paradoxically increased. This creates a challenging environment for banks seeking to maintain their funding base.
Potential for Further SBN Rate Increases
While Setiaatmadja believes SBN interest rates are beginning to normalize, he cautions that they could rise again if the government issues new SBNs and market demand is insufficient. He explains:
Kalau demand nya kurang, berarti SBN akan meningkatkan pricing itu. Nah, ini merupakan challenge bagi perbankan.
Jahja Setiaatmadja,President director of BCA
This potential increase in SBN pricing poses a significant challenge for banks.
Impact on BCA’s High-Net-Worth Clients
Setiaatmadja further elaborates that this situation could considerably impact BCA, as its 200,000 high-net-worth clients contribute 70% of the bank’s total funding. These affluent clients are the most likely to shift their funds to SBNs, as they do not necessarily require short-term deposit maturities.
Itu yang potensi untuk pindah dan beli government bond. Itu menjadi persaingan kita.
Jahja Setiaatmadja, President director of BCA
This represents a direct competitive threat to BCA’s deposit base.
BCA’s Deposit Figures
As an illustration, BCA’s deposits in January 2025 totaled rp 195.4 trillion, a decrease from Rp 205.93 trillion during the same period the previous year. This decline highlights the impact of the shift in investment preferences.
Bank Raya Echoes Similar Concerns
Kicky Andrie Davetra, Business Director of Bank Raya, expresses similar concerns, stating that high SBN yields make it arduous for banks to compete for liquidity. Consequently, Bank Raya is compelled to offer more attractive interest rates to retain and attract depositors.
Liquidity Squeeze
Davetra notes the impact of SBN rates on overall liquidity:
Obligasi-obligasi yang secara rate coba mainnya di 6% sampai 9%, sementara BI rate di 5,75%. Jadi kan likuiditas akhirnya kesedot.
kicky andrie Davetra, Business Director of Bank Raya
This “siphoning” of liquidity towards higher-yielding bonds creates challenges for banks.
Limited Impact of Macroprudential Incentives
Davetra adds that Bank Raya has not significantly benefited from BI’s macroprudential liquidity incentives, as its credit exposure to the qualifying sectors is limited.
Bank Oke’s Viewpoint on Liquidity Competition
Efdinal alamsyah, Compliance Director of Bank Oke, concurs that provided that SBN yields and other investment instruments remain high, competition for liquidity will persist. Though, he emphasizes that liquidity competition does not automatically translate to a mass exodus of customer funds to SBNs.
Banks Must Act to Retain Customers
Alamsyah stresses that banks must proactively offer attractive incentives to retain their customer base. He warns:
Tapi kalau bank hanya diam dan tidak melakukan apa-apa, bisa saja dana nasabah pindah.
Efdinal Alamsyah, Compliance Director of Bank Oke
Inaction could lead to a significant outflow of customer funds.
Banks vs. Bonds: Why Jakarta Banks Are Battling for Liquidity
Banks in Jakarta are facing a new challenge: competing with government bonds (SBNs) for investor funds. This competition is creating liquidity pressures and impacting bank strategies. Here’s a breakdown of what’s happening and why it matters.
Q&A: Understanding the Liquidity Crunch in Jakarta’s Banking Sector
Why are Jakarta banks facing increased competition for liquidity?
Jakarta banks are experiencing heightened competition for liquidity primarily due to the attractiveness of Surat Berharga Negara (SBN), or State Bonds. these bonds offer higher interest rates compared to traditional bank deposits, drawing investors away from banks.
Higher Yields: SBN yields, especially for 2-year and 10-year tenors, have remained above 6% as of February 2025, while deposit interest rates for a 2-year tenor hovered around 4% in January 2025, according to Bank Indonesia (BI) data.
Shifting Investment Preferences: This interest rate disparity is driving a shift in investment preferences, with individuals increasingly investing in SBNs.
What are Surat Berharga Negara (SBNs) and why are they so appealing?
Surat Berharga Negara (SBNs) are State Bonds issued by the Indonesian government.They are appealing as:
Attractive Returns: SBNs offer higher interest rates compared to bank deposits.
Government Backing: They are considered relatively safe investments due to government backing.
Investment Growth: Individual ownership of SBNs has surged by 25.79% year-on-year, reaching Rp 576.92 trillion.
How is the shift to SBNs affecting banks’ Third-Party Funds (DPK)?
The increasing investment in SBNs is impacting banks’ Third-Party Funds (DPK), which are funds from individual customers.
DPK Decline: The banking sector’s DPK from individual customers has experienced a year-on-year decrease of approximately 2.6%.
Liquidity Squeeze: The movement of funds from bank deposits to SBNs creates a “liquidity squeeze” for banks, making it more difficult for them to maintain their funding base.
How are banks like BCA responding to the competition from SBNs?
Bank Central Asia (BCA) acknowledges the competitive pressure from SBNs and is aware of the potential impact on its high-net-worth clients.
Acknowledging Competition: Jahja Setiaatmadja, President Director of BCA, recognizes that SBN interest rates have increased even as BI’s benchmark interest rate has decreased, creating a challenging surroundings.
Impact on High-Net-Worth Clients: BCA is particularly concerned about its 200,000 high-net-worth clients, who contribute 70% of the bank’s total funding, as they are most likely to shift funds to SBNs.
Deposit Figures: BCA’s deposits in January 2025 totaled rp 195.4 trillion,a decrease from Rp 205.93 trillion during the same period the previous year.
What is Bank Raya’s perspective on the liquidity competition?
bank Raya echoes similar concerns about the challenges posed by high SBN yields.
Higher Interest Rates: Bank Raya is compelled to offer more attractive interest rates to retain and attract depositors due to the competition from SBNs.
Limited Impact of Macroprudential Incentives: Bank Raya has not significantly benefited from BI’s macroprudential liquidity incentives,as its credit exposure to the qualifying sectors is limited.
Liquidity Squeeze Observed: SBN rates draw liquidity away making it challenging
How are banks like Bank Oke planning to retain customers amid the SBN surge?
Bank Oke emphasizes the importance of proactive measures to retain customers.
Proactive Incentives: Efdinal Alamsyah, Compliance director of Bank Oke, stresses that banks must offer attractive incentives to retain their customer base.
Risk of Inaction: he warns that inaction could lead to a significant outflow of customer funds.
What are the potential risks for banks if they don’t adapt to the SBN competition?
If banks fail to adapt to the competition from SBNs, they face several potential risks:
Loss of Deposits: Customers may move their funds to SBNs or other investments offering higher returns.
Increased Funding Costs: Banks may need to offer higher interest rates on deposits to attract and retain customers,increasing their funding costs.
Liquidity Issues: A decline in deposits can lead to liquidity issues, making it more difficult for banks to meet their obligations.
Could SBN rates increase further and what impact would that have?
Yes, SBN interest rates could perhaps rise again if the government issues new SBNs and market demand is insufficient.
Increased Pricing: If demand is low, the government may need to increase the pricing (interest rates) of SBNs to attract investors.
Further Challenge for Banks: This would pose a further challenge for banks already struggling to compete with existing SBN yields.
What macroprudential incentives are available and are they helping?
Bank Indonesia (BI) offers macroprudential liquidity incentives, but their effectiveness varies among banks.
Limited Benefit: Bank Raya, such as, has not significantly benefited from these incentives due to its limited credit exposure to qualifying sectors.
The effectiveness of macroprudential incentives varies specifically with banks that have limited credit exposure.
Summary: Key Differences Between Bank Deposits and sbns
| Feature | Bank Deposits | Surat Berharga Negara (SBN) |
|——————|——————————–|—————————–|
| Interest Rates | Generally lower | Generally higher |
| Issuer | Commercial Banks | Indonesian Government |
| Risk Level | Varies by bank,deposit insurance | Considered relatively safe |
| Liquidity | Typically more liquid | May have lock-in periods |
| Impact on Banks | Source of funding (DPK) | Competes for funding |