Bank BTPS Syariah (BTPS.IJ Rp1,000; BUY TP Rp1,400) 3Q26 Earnings: Inline; NIM Recovery and Cleaner Asset Quality Drive a Solid Result

Bank BTPS Syariah (BTPS IJ)

3Q26 Earnings: Inline; NIM Recovery and Cleaner Asset Quality Drive a Solid Result

BTPS booked 3Q26 net profit of Rp356bn (+6% qoq, +18% yoy), bringing its 9M26 NP to Rp1tr (+7% yoy), inline with ours and cons.
CoC fell to 3.8% (-129bps qoq, -469bps yoy) in 3Q26 on improving asset quality, offsetting weaker PPOP.
Management maintains double-digit FY26 NPAT growth. Maintain Buy rating with an unchanged TP of Rp1,400.

Provision-led earnings, inline with upside bias

BTPS reported a net profit of Rp356bn in 3Q26 (+6% qoq, +18% yoy), bringing its 9M26 NP to Rp1.0tr (+7% yoy), inline at 75% of our FY26F and 77% of consensus. NIM improved 47bps qoq to 22.1% as financing yield rose 69bps qoq to 42.4%, outpacing the higher CoF of 4.0% (+16bps qoq). However, opex rose 6% qoq and 10% yoy, lifting CIR to 54.2% and pushing PPOP down to Rp554bn (-3% qoq, -9% yoy). The bottom line was mainly supported by lower provisions (-24% qoq, -51% yoy), which brought CoC down to 3.8% (-129bps qoq, -469bps yoy).

Asset quality continued to improve; loan growth paused qoq

NPL ratio eased to 2.2% (-19bps qoq, -75bps yoy) and LaR fell to 4.1% (-94bps qoq, -86bps yoy) in 3Q26?, while LaR coverage rose to 178.9% (+2,184bps qoq). Management indicated that lower CoC was helped by lower X-days and reversals from improving restructured loans. Loans were flat qoq (+12% yoy) at Rp11.1tr, while customer deposits grew 2% qoq/6% yoy to Rp12.4tr, bringing LDR down to 89.9% (-149bps qoq, +481bps yoy).

On track for double-digit NPAT growth

Management maintained its double-digit FY26 NPAT growth target. CoC of 4.8-5.0% is seen as the new normal (c.5% in 3Q26 excluding reversals), with 4Q26 CoC expected below 5% amid the continued recovery in Sumatra. Group lending disbursement is running at Rp1.3-1.4tr per month, and management expects group financing to grow in 4Q26. Individual financing has also reached Rp102bn (avg. ticket c.Rp14.6mn) with a 97.7% repayment rate, already hitting the Rp100bn guidance.

Maintain Buy rating with TP of Rp1,400

We maintain our Buy rating with an unchanged forecast and TP of Rp1,400, based on a 2-year inverse CoE of 12.9% and FY26F ROE of 13.2%, implying an FV PBV of 1.0x. Risks to our view are CoC trend reversal, a continued rise in CoF, and slower-than-expected group lending growth. Tactical (3M) view: OW, improving asset quality to support earnings and massive buyback program.

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