0931 GMT - Indonesian state-owned banks face a profitability squeeze as their margins narrow, S&P Global Ratings analysts say in a report. Rapid growth in lower-yielding loans to state-owned-enterprise and recent domestic policy-rate increases are weighing on net interest margins. In 1H, lending by these banks grew much higher rate than the industry average, driven mainly from the banks' participation in state-linked economic programs and increased lending to SOEs. Bank Indonesia has also raised its interest rate by 100 bps this year to manage rupiah volatility amid the Middle East conflict. S&P Global expect the banks' NIMs to decline by 10 bps to 20 bps over the next 12-18 months.
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