Bank Mandiri (BMRI IJ)

2Q26 Earnings: Beat; Lower CoC Offset NIM Compression

• BMRI posted 2Q26 net profit of Rp15.0tr (-2% qoq, +33% yoy) bringing 1H26 to Rp30.4tr (+24% yoy).
• Management lowered FY26 NIM guidance to 4.3-4.5% (from 4.5-4.7%) while maintaining CoC, loan growth, and CIR guidance.
• As pressure on NIM continue and opex normalizes in 2H26, we keep our forecasts and TP unchanged and maintain Buy rating.

Robust bottom line amid compressed NIM

BMRI posted a net profit of Rp15.0tr in 2Q26 (-2% qoq, +33% yoy), supported by strong fee-based income, lower opex, and lower provision expenses, more than offsetting NIM compression. This brings 1H26 net profit to Rp30.4tr (+24% yoy), forming 53% of both ours and consensus FY26F estimates, slightly ahead of expectations. Bank-only NIM declined 23bps qoq to 4.21%, driven by a 20bps drop in loan yields and a 12bps increase in CoF. Management attributed the yield pressure to a newly disbursed related-party corporate loans, which carry yields around 120bps below the normal corporate portfolio. Non-interest income grew 33% yoy, supported by both recurring and non-recurring income.

Solid loan growth with stable CoC driven by wholesale asset quality

Despite a 19% loan growth, provision expenses declined 2% qoq, keeping CoC at around 60bps. NPL remained stable at 0.98%, while LaR improved to 5.83% (-19bps qoq). Loan growth remained wholesale-driven, with related-party loans growing 13% YTD and non-related corporate loans accelerating to 4% YTD from 0.6% in 1Q26. While corporate and commercial asset quality continued to improve, SME, micro & payroll, and consumer segments deteriorated further during the quarter.

Lowering NIM guidance, keeping others intact

CoC remained at around 60bps, within the 60–80bps guidance range, supported by resilient overall asset quality. Management maintained FY26 guidance for loan growth (7–9%), CoC (0.6–0.8%), and CIR (40–41%), but revised down NIM guidance again to 4.3–4.5% (from 4.5–4.7%), reflecting the prolonged pressure on loan yields, with consolidated NIM also expected to decline to 4.56% (-32bps yoy). Management expects NIM to bottom in 3Q26 before gradually recovering.

Maintain BUY with TP of Rp6,200

We maintain our Buy rating with an unchanged forecast and TP of Rp6,200 based on 5-year inverse CoE of 11.6% and LTG of 3%. Our TP implies an FV PBV of 1.8x. Risks to our view are prolonged high oil price affecting NIM and asset quality. Tactical (3M) view: N. Despite robust 2Q26 results, the stock might see high volatility driven by policies uncertainties and NIM compression in 3Q26.

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