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View all search resultsFitch cuts outlook on Indonesian banks after sovereign warning
Economists say the downward revision could raise lenders’ funding costs and put pressure on share and bond prices, though strong capital and profitability should cushion the impact.
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High-rise buildings stand in Jakarta’s business district on Nov. 4, 2025. (REUTERS/Willy Kurniawan)
F
itch Ratings has changed the outlook on several large Indonesian banks to “negative” while affirming their current ratings, following its recent downward revision of the country’s sovereign rating outlook.
In separate reports released on Monday, the credit rating agency said the revisions affected a range of lenders, including both state-owned and private local banks as well as foreign-owned banks operating in Indonesia.
The rating action comes just days after Fitch revised the outlook on Indonesia’s sovereign credit rating to “negative” while affirming the country’s long-term foreign-currency issuer default rating at “BBB” on March 4.
According to the credit rating provider, the changes to the bank’s outlooks reflect their exposure to the same operating environment and credit conditions as the sovereign.
Among state-owned lenders, Fitch revised the outlooks to “negative” for Bank Mandiri, Bank Rakyat Indonesia (BRI), Bank Negara Indonesia (BNI) and Indonesia Eximbank.
“The government's ability to provide support has diminished, as reflected in the Negative Outlook on the sovereign rating. Consequently, the Outlooks on the Long-Term IDRs of Mandiri, BRI, BNI and Indo Eximbank, which are driven by their [government support ratings], have been revised to Negative to mirror that on the sovereign rating,” the report said.
The firm also revised its outlook on Bank Central Asia (BCA) to “negative” while affirming the private lenders’ long-term issuer default rating at “BBB”.
