Indonesian banks reap geographic benefits, study finds – Economy

Banks in Indonesia and other countries of the region stand to gain from a stronger macroeconomic outlook, while European lenders face much bleaker prospects, according to McKinsey & Company, but emerging markets as a whole are no longer what they used to be.

Profitability in the banking industry reached a 14-year high in 2022 with expected return on equity (ROE) of 12 percent and revenue growth propelled by a sharp increase in net margins as interest rates rose, the management-consulting firm says in its Global Banking Annual Review 2022.

The projected increase in profitably comes after a decade of more or less flat ROE at around 8 percent.