Bank Tabungan Negara (BBTN.IJ Rp1,345; BUY TP Rp1,500) FY25 Results: Beating estimates on strong NIM amid EIR adjustments and improving CoF

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Bank Tabungan Negara (BBTN IJ)

FY25 Results: Beating estimates on strong NIM amid EIR adjustments and improving CoF

BBTN booked NP of Rp1.2tr in 4Q25 (doubled qoq, +30% yoy) resulting in FY25 NP of Rp3.5tr (+16% yoy), beating our and consensus’ FY25F.
NIM was robust at 4.2% in 4Q25 as EA yield increased supported by EIR adjustment and CoF improvement, offsetting higher CoC.
Maintain a Buy rating with a higher TP of Rp1,500 as we adjusted FY26/27F earnings by +9/+3%.

Strong earnings growth on higher NIM offsetting higher opex and CoC

BBTN posted net profit of Rp3.5tr in FY25 (+16% yoy), beating our and consensus (113%/ 109% of FY25F) estimates. The strong performance was driven by a sharp 130bps expansion in NIM to 4.0%, supported by a 105bps improvement in EA yield (partly from EIR adjustments) and a 32bps decline in CoF as the bank reduced reliance on high-cost deposits. PPOP jumped 81% yoy, while CIR improved significantly to 52.8% (from 63.9%) despite 15% opex growth and 10% lower other operating income. Provision expenses rose 212% yoy, lifting CoC to 1.6% (vs. 0.6% in FY24), while overall NPL improved slightly to 3.1%, supported by better non-housing loan quality. Coverage strengthened to 124% amid higher provisioning and improved asset quality trends in 2H25.

Record high earnings on strong NIM

BBTN delivered a five-year record high quarterly net profit of Rp1.2tr in 4Q25 (doubled qoq, +30% yoy), driven by a spike in EA yield and strong NII growth. NIM surged to 4.8% as EA yield climbed to 8.3%, while CoF improved to 3.5% on better liquidity and CASA revamp, with cost of deposit declining to 2.9% in Dec25 (vs. 3.2% in Nov25 and 4.1% in Dec24). Despite higher opex (+13% qoq, +24% yoy) and provisions (+108% qoq, +151% yoy), profitability remained strong. Asset quality improved, with NPL declining to 3.1% from 3.4% in Sep25, driven by improvements in both housing and non-housing loans.

Moderating growth but CoC normalization will drive profitability

Management guides for more normalized growth in FY26, targeting 8–10% loan growth and 7–9% deposit growth, with LDR at 94–97%. CoC is expected to decline to 1.0–1.2%, NPL to fall below 3%, and coverage to stay above 125%. Net profit will be supported by continued improvement in funding costs and housing loan asset quality, positioning the bank for stronger profitability despite moderating balance sheet expansion.

Maintain Buy with a higher TP of Rp1,500

We revised our FY26/27F earnings forecasts by +9/+3% to factor in a slightly lower NIM but offset by lower CoC. Hence, we raised our TP to Rp1,500 with a GGM approach, using a 14.9% 5-year avg. CoE and an FY26F ROE of 9.4%, which yields an implied FV PBV of 0.5x. Key risks to our call include weaker asset quality in the wholesale segment and a rise in CoF. Tactical (3M): OW. We believe CoF and asset quality trends remain favorable in the short-term.

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