Bank BTPN Syariah (BTPS.IJ Rp1,400; HOLD TP Rp1,500) 3Q25 Earnings Beat; Lower-than-expected CoC amid one-off provision in subsidiary’s investment

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Bank BTPN Syariah (BTPS IJ)

3Q25 Earnings Beat; Lower-than-expected CoC amid one-off provision in subsidiary’s investment

BTPS booked 3Q25 net profit of Rp302bn (-9% qoq, +38% yoy) bringing its 9M25 NP to Rp945bn (+23% yoy), above ours and in line with cons.
CoC rose to 8.5% in 3Q25 as the bank was proactively provisioning for its start-up investment; excluding this, COC would have been flat qoq.
We adjusted our FY25-27F net profit est. by 5.4-7.2%, but maintain our Hold rating with a TP of Rp1,500, as we view the stock as fairly valued.

9M25: Better-than-expected CoC drive earnings above estimate

In 9M25, BTPS recorded Rp945bn net profit (+23% yoy), above our estimate (79% of FY25F) but in line with consensus (75% of FY25F). The outperformance was mainly driven by a lower CoC of 8.2%, below our FY25F assumption of 9.2% (FY24: 12.5%), which cushioned a 12% yoy decline in PPOP. PPOP weakness reflected a 3% yoy drop in NII and 6% higher opex, pushing CIR up to 48.6% (from 44.2% in 9M24). The loan book contracted 3% qoq to Rp9.9tr, reversing Aug25’s growth, as high run-offs followed heavy disbursements made last year. Coverage remained strong at 300%, though it could normalize to ~250% if the subsidiary’s start-up turns non-performing.

3Q25: Down qoq on one-off provisions and higher opex

BTPS posted a resilient 3Q25 performance with net profit of Rp302bn, down 9% qoq due to higher costs but up 38% yoy on lower CoC. Opex rose 4% qoq, while CoC increased to 8.5% from 7.7%, mainly driven by one-off provisioning related to start-up investment of Rp54bn. NIM remained steady at around 24%, reflecting stable loan yields despite the smaller book. Loan balance declined 3% qoq to Rp9.9tr, while deposits grew 2%, bringing LDR down to 85%. Asset quality improved as NPL and LaR fell to 2.9% and 5.0%, respectively, with net write-offs steady at Rp215bn.

Outlook: Robust asset quality with better NIM and loan growth

Management guided for flattish loan growth in 4Q25. NIM is expected to improve next year, driven by the absence of the one-off program and by easing CoF. Treasury yield softness may partially offset this margin gain, but overall profitability should benefit from normalized provisions. We adjusted our net profit estimates by +5.4%/+7.5%/+7.2% for FY25F/26F/27F as we lowered our CoC forecasts to 8.2%/7.6%/7.4% (vs. 9.0%/8.8%/8.6% prev.).

Maintain Hold rating with an unchanged TP of Rp1,500

Despite raising our estimate, hence FY25F ROE increasing to 13.0% (12.3% prev.), we maintain our TP at Rp1,500 as updated 2-year avg. CoE is down to 11.9% (11.1% prev.). We maintain our HOLD call as the improving asset quality issue has been priced in. The key risk to our view is lower-than-expected CoC and higher-than-expected loan growth.

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