Best Banking Stocks for Investment

The banking sector has always been a top choice for long-term investors due to its combination of stability, regular dividends, and consistent business growth.

OJK data as of April 2026 shows the national banking capital adequacy ratio (CAR) at 23.97% and the non-performing loan (NPL) ratio maintained at 2.17%, indicating solid industry health.

As of June 2026, bank credit grew 12.67% YoY, up from 11.51% in the previous month, while the BI Rate remained at 5.75%.

However, shares of major banks actually weakened as the market was still waiting for stronger catalysts, especially signals of interest rate cuts.

Key Points

• The banking sector offers a combination of regular dividends and potential capital gains, with major banks such as BBCA, BBRI, BMRI, and BBNI being long-term options.

• Bank credit grew 12.67% year-on-year through June 2026, but bank stocks have yet to recover as the market awaits a signal of a BI Rate cut in 2027.

• Analysts recommend BBCA and BMRI as preferred bank stocks, as BBCA has the strongest funding structure and BMRI is considered very cheap.

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Why is the banking sector consistently a popular choice for investors?

The banking sector has several advantages that keep it on investors' radar:

1. Regular Dividends

Major Indonesian banks generally distribute dividends annually from consistent net profits, making them a reliable source of passive income.

2. Strict OJK Regulations

The OJK requires banks to maintain capital adequacy ratios (CAR), non-performing loan (NPL) limits, and liquidity, providing additional protection for investors.

3. High Liquidity

Shares of major banks such as BBCA and BMRI are highly liquid, making it easy for investors to enter and exit the market.

4. Economic Growth

Banks are the backbone of the economy, when the economy grows, demand for credit increases and bank profits also increase.

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Key Indicators for Selecting Bank Stocks

Before choosing bank stocks, understand the following indicators:

Key Indicators for Selecting Bank Stocks

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Banking Stock Recommendations from Analysts

Here are the bank stock recommendations from Kiwoom Securities and KISI analysts:

1. BBCA – Bank Central Asia Tbk

BBCA Stock Recommendation

Superiority: The strongest funding structure with CASA (Current Account Savings Account) 85.2%, the cost of funds is much lower than other banks.

The CAR is very solid at 29.9%. Analysts view BBCA as the "gold standard" of Indonesian banking and a prime destination for foreign investors if MSCI maintains Indonesia's emerging market status.

2. BMRI – Bank Mandiri Tbk

BMRI Stock Recommendations

Key points: 16.2% credit growth and net profit of IDR 15.4 trillion in Q1 2026 (+16% YoY). Analysts consider BMRI "very cheap after a sharp decline" and attractive due to its discounted valuation.

3. BBRI – Bank Rakyat Indonesia Tbk

BBRI Stock Recommendations

Superiority: Q1 2026 net profit of IDR 15.5 trillion (+13.7% YoY) and the highest dividend yield among large banks.

Focusing on the MSME and micro segments resulted in a higher NIM. However, the NPL rose to 3.31% in Q1 2026, representing an asset quality risk that warrants close attention.

4. BBNI – Bank Negara Indonesia Tbk

BBNI Stock Recommendations

Superiority: Net profit for the first four months of 2026 was IDR 7.29 trillion (+6% YoY), with credit growth of 21%. Valuation is historically lower than the other Big Four companies, representing a re-rating opportunity for long-term investors.

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Secondary Bank Stocks That Are Also Interesting

Secondary Bank Stocks

BRIS recorded a Q1 2026 net profit of IDR 2.2 trillion (+17.1% YoY) with double-digit asset growth of 10.49% YoY.

BBTN became the main beneficiary of the Three Million Homes program with bank-only profits increasing 21.1% YoY.

BNGA has a projected ROE of 12% and solid core capital.

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Why Haven't Bank Stocks Recovered?

Despite 12.67% year-on-year credit growth, bank stocks actually weakened. Analysts assess:

1. The market is waiting for a signal to lower the BI rate.

The projected decline will only occur in 2027, so the strengthening of bank shares in the second half of 2026 will still be limited.

2. NIM Concerns

Rapid credit growth amid depressed purchasing power could turn into a drag on bad debt, particularly in the MSME segment, which has contracted for five consecutive months.
 

3. MSCI Catalyst

MSCI's decision in November 2026 will determine foreign capital flows. If Indonesia retains its emerging market status, BBCA and BMRI will be prime targets for foreign investors.

Long-Term Investment Strategy in Bank Stocks

1. Buy and Hold

The simplest and most proven strategy for long-term investors: Choose a bank with strong fundamentals and a 5-10-year horizon.

2. Dollar-Cost Averaging (DCA)

Buy regularly without caring about the price, the average purchase price is at low and high levels.

3. Dividend Reinvestment

Turn dividends back into stocks for a compounding effect, building wealth without additional capital.

Conclusion

Banking stocks remain a top choice for long-term investment. BBCA and BMRI are top analyst recommendations, with strong fundamentals and attractive valuations, while BBRI offers the highest dividend yield.

However, investors need to pay attention to NPL risks, dependence on interest rates, and the MSCI November 2026 decision. Choose a bank that suits your risk profile and financial goals.

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FAQ

Which bank stocks are the safest for beginners?

BBCA and BMRI are relatively safe due to their high liquidity, strong fundamentals, and strict supervision by the OJK.

Which bank stock has the highest dividend?

BBRI is known for having the highest dividend yield among major banks.

How long should you hold bank shares?

Ideally 5-10 years for the effect of dividend compounding and business growth.

What are the main risks of banking stocks?

NPLs rise when the economy slows, interest rates rise, and stock prices are volatile.

When is the best time to buy bank stocks?

When a price correction occurs and signals of a BI Rate reduction begin to appear.