Second Liner Banks: Who Is Most Ready To Move Up? Competitiveness Analysis of KBMI 3 Banks

Abstract

The transformation of the national banking classification system through the KBMI scheme requires KBMI 3 banks (second-liner banks) to enhance their competitiveness in order to advance to KBMI 4. The urgency of this study lies in the importance of expanding the structure of large banks to create a more inclusive, stable, and competitive banking industry. Using the Competitive Profile Matrix (CPM) approach, this research analyzes the competitive position of ten KBMI 3 banks based on seven strategic financial indicators: CAR, CIR, NPL, NIM, CASA, LDR, and ROE. The findings reveal that Bank CIMB Niaga (BNGA) and Bank Syariah Indonesia (BRIS) are the strongest candidates for upgrading, with the highest aggregate competitive scores. BNGA demonstrates advantages in efficiency and stable profitability, while BRIS shows aggressive growth driven by strengthened sharia-based structures following its merger. The novelty of this study lies in the explicit application of CPM to map the readiness of individual banks in the context of KBMI level upgrading a methodological approach that has rarely been applied in the Indonesian banking literature. These findings provide valuable contributions for regulators in designing acceleration policies for consolidation, as well as for investors in assessing the long-term prospects of mid-sized banks through a quantitative approach based on fundamental ratios.