Indonesia gold demand rises 47%, BRIS gold segment thrives

JAKARTA – A latest report by the World Gold Council (WGC) showed that demand for gold bars and coins as investment instruments in Indonesia surged 47% year-on-year in the first quarter of 2026 to 23.6 tonnes.

The figure accounted for nearly 5% of global demand for gold bars and coins, which also grew 42% to 474 tonnes by the end of March 2026.

Amid the bullish gold trend, one of Indonesia’s state-owned Islamic banks and part of the domestic bullion banking ecosystem, PT Bank Syariah Indonesia (Persero) Tbk (BRIS), has begun reaping the benefits.

BRIS posted a 17.1% year-on-year increase in net profit to IDR 2.2 trillion in the first quarter of 2026, supported by solid operational performance.

BRIS financing grew 14.4% in the first quarter of 2026 to IDR 328.5 trillion, driven by expansion in the consumer segment.

However, its gold business — including gold instalment financing and gold pawning — has now emerged as one of the top three contributors to the financing segment, overtaking pension-related financing and extending the strengthening trend seen since the end of the 2025 financial year.

The gold business contributed around 8.8% of BRIS’ total financing in the first quarter of 2026, equivalent to IDR 28.8 trillion, with total digital gold disbursement reaching 2.7 tonnes.

The number of customers also increased significantly, with gold instalment customers rising 39% to around 566,000, while gold pawning customers climbed 57.2% to 196,100.

The gold financing segment also recorded a gross non-performing financing (NPF) ratio of just 0.01% in the first quarter of 2026, indicating strong financing quality compared with BRIS’ overall gross NPF level of 1.8%.

Beyond financing, gold services also supported BRIS’ fee-based income growth in the first quarter of 2026, contributing around 33.6% of the bank’s total fee income.

Gold and Hajj savings become increasingly linked

Based on BRIS’ first-quarter 2026 performance presentation, funding for gold financing remains largely supported by the retail business, accounting for 68.3%.

Hajj savings have also emerged as one of the largest funding contributors to the segment, accounting for 9.5%, followed by payroll financing at 3.9%.

Marissa Salim previously highlighted gold as a resilient asset option to help grow Indonesian pilgrims’ Hajj savings in a report released in late April.

“For Hajj funds with long-term investment horizons and low tolerance for capital losses, gold’s resilience can help preserve asset value across market cycles,” she said.

This has also become one of BRIS’ strategies to expand its gold business and demand, namely through product cross-selling by directing digital gold users towards Hajj savings products.

As of March 2026, the proportion of digital gold customers who also held Hajj savings accounts increased from 28.32% in March 2025 to 48.22% by the end of the first quarter of 2026.

BRIS also recorded the fastest savings growth in the industry, supported by an increase in Hajj savings customers to 7.25 million as of the first quarter of 2026.

Savings grew 20.2% to IDR 164.5 trillion, helping drive the bank’s third-party funds (DPK) up 18% to a total of IDR 376.8 trillion by the end of March 2026. (ZH)