Strategy
Strategy: Digital Banks: Beyond Growth, Different Paths To ROE
Highlights
- SeaBank validates the ecosystem model; SUPA is the emerging challenger. SeaBank has translated its Shopee integration into Rp53t in assets and a 23.6% annualised ROE. SUPA offers the strongest listed organic growth exposure, but its 22% CASA mix and 7% cost of funds must improve for rapid asset expansion to generate attractive returns.
- ARTO offers unconfirmed asset-origination optionality. Its sizeable customer and deposit franchise generate only 6% annualised ROE. Bloomberg reported a shareholder-level review involving ARTO and BFIN, although neither company has confirmed a transaction. Any upside depends on whether an eventual structure improves origination and ROE without excessive premiums or dilution.
- BBYB combines operating recovery with speculative ownership optionality. Its 58% LDR and 50% CAR provide room to grow, while Akulaku’s approved gradual divestment and OJK’s proposed removal of KBMI 1 could encourage ownership changes or consolidation. However, no control sale has been confirmed, and re-rating requires either a value accretive transaction or sustainable loan growth without higher credit costs.
What’s New
The next contest is control of both sides of the balance sheet. Early digitalisation relied on app downloads, promotional deposits and partnership-led lending. As customer acquisition matures, competitive advantage increasingly comes from controlling both liabilities and assets: A high-frequency ecosystem that generates sticky deposits, proprietary data and repeatable loan demand. The 2Q26 data supports this shift. SeaBank (not listed) and Superbank (SUPA) expanded loans by 53% and 60% yoy, while Bank Jago (ARTO) delivered balanced loan and deposit growth of 24% and 23%. Bank Neo Commerce (BBYB), despite a large digital user base, recorded 12% loan and 8% deposit contractions.
SeaBank provides the proof of concept; SUPA is the emerging challenger. SeaBank's common ownership and deep integration with Shopee connects commerce, payments, deposits and credit within a relatively closed loop. This has made SeaBank Indonesia’s largest digital bank, with loans of Rp39.8t, assets of Rp53t, up from Rp11t in 2021, and an annualised ROE of 23.6% in 1H26, demonstrating that ecosystem banking can deliver both scale and attractive returns. SUPA is following a similar path through Grab, OVO and Emtek’s ecosystem: Around 7m users supported 60% loan growth, 89% deposit growth and 130% pre-provision operating profit (PPOP) growth. Management targets a mid-teens ROE in 2027 and Rp100t in assets within five to seven years (1H26: Rp27t), requiring a broader lending franchise beyond its existing ecosystem and consumer-focused segments. Nevertheless, funding remains SUPA’s main constraint: CASA represented only 22% of deposits and its estimated cost of funds was around 7%, the highest among peers.
ARTO has built liabilities; the strategic question is how to originate better assets. ARTO served 20.1m customers and gathered Rp27.6t in deposits in 1H26, including a 53% CASA mix, while 3.6m users were connected to Bibit and Stockbit. Yet, lending still relies heavily on platforms and financing partners, and its annualised ROE remained around 6%. Bloomberg reported that Jerry Ng and other investors are reviewing options involving ARTO and BFIN, including a potential merger; neither company has confirmed such a transaction. Strategically, BFIN’s secured-financing products, physical distribution, salesforce and collection capabilities could help ARTO monetise its customers and deposits more effectively. A partnership, share swap, holding-company structure or new strategic investor could potentially deliver similar benefits. Any re-rating would depend on whether an eventual transaction broadens loan origination and creates a credible path towards sustainable double-digit ROE without excessive premiums or dilution.
Highlights
- SeaBank validates the ecosystem model; SUPA is the emerging challenger. SeaBank has translated its Shopee integration into Rp53t in assets and a 23.6% annualised ROE. SUPA offers the strongest listed organic growth exposure, but its 22% CASA mix and 7% cost of funds must improve for rapid asset expansion to generate attractive returns.
- ARTO offers unconfirmed asset-origination optionality. Its sizeable customer and deposit franchise generate only 6% annualised ROE. Bloomberg reported a shareholder-level review involving ARTO and BFIN, although neither company has confirmed a transaction. Any upside depends on whether an eventual structure improves origination and ROE without excessive premiums or dilution.
- BBYB combines operating recovery with speculative ownership optionality. Its 58% LDR and 50% CAR provide room to grow, while Akulaku’s approved gradual divestment and OJK’s proposed removal of KBMI 1 could encourage ownership changes or consolidation. However, no control sale has been confirmed, and re-rating requires either a value accretive transaction or sustainable loan growth without higher credit costs.
What’s New
The next contest is control of both sides of the balance sheet. Early digitalisation relied on app downloads, promotional deposits and partnership-led lending. As customer acquisition matures, competitive advantage increasingly comes from controlling both liabilities and assets: A high-frequency ecosystem that generates sticky deposits, proprietary data and repeatable loan demand. The 2Q26 data supports this shift. SeaBank (not listed) and Superbank (SUPA) expanded loans by 53% and 60% yoy, while Bank Jago (ARTO) delivered balanced loan and deposit growth of 24% and 23%. Bank Neo Commerce (BBYB), despite a large digital user base, recorded 12% loan and 8% deposit contractions.
SeaBank provides the proof of concept; SUPA is the emerging challenger. SeaBank's common ownership and deep integration with Shopee connects commerce, payments, deposits and credit within a relatively closed loop. This has made SeaBank Indonesia’s largest digital bank, with loans of Rp39.8t, assets of Rp53t, up from Rp11t in 2021, and an annualised ROE of 23.6% in 1H26, demonstrating that ecosystem banking can deliver both scale and attractive returns. SUPA is following a similar path through Grab, OVO and Emtek’s ecosystem: Around 7m users supported 60% loan growth, 89% deposit growth and 130% pre-provision operating profit (PPOP) growth. Management targets a mid-teens ROE in 2027 and Rp100t in assets within five to seven years (1H26: Rp27t), requiring a broader lending franchise beyond its existing ecosystem and consumer-focused segments. Nevertheless, funding remains SUPA’s main constraint: CASA represented only 22% of deposits and its estimated cost of funds was around 7%, the highest among peers.
ARTO has built liabilities; the strategic question is how to originate better assets. ARTO served 20.1m customers and gathered Rp27.6t in deposits in 1H26, including a 53% CASA mix, while 3.6m users were connected to Bibit and Stockbit. Yet, lending still relies heavily on platforms and financing partners, and its annualised ROE remained around 6%. Bloomberg reported that Jerry Ng and other investors are reviewing options involving ARTO and BFIN, including a potential merger; neither company has confirmed such a transaction. Strategically, BFIN’s secured-financing products, physical distribution, salesforce and collection capabilities could help ARTO monetise its customers and deposits more effectively. A partnership, share swap, holding-company structure or new strategic investor could potentially deliver similar benefits. Any re-rating would depend on whether an eventual transaction broadens loan origination and creates a credible path towards sustainable double-digit ROE without excessive premiums or dilution.
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