Bank Mandiri (BMRI IJ)
2Q25 Earnings Missed; Profit Hit by One-Off Cost
- BMRI reported net profit of Rp11.3tr in 2Q25 (-15% qoq, -19% yoy), bringing its 1H25 NP to Rp24.5tr (-8% yoy), missing our/cons FY25F.
- cut FY25 guidance for loan growth to 8–10%, NIM to 4.8–5.0%, CoC to 0.8–1.0%, while expecting CIR to be at 45%.
- We maintain our Buy rating with a lower TP of Rp5,000 as we cut our FY25/26/27F by 9.9/13.4/10.9%, reflecting lower ROE.
1H25: weak net profit despite stable asset quality
BMRI’s 1H25 net profit came in at Rp24.5tr (-8% yoy), missing both our (43%) and cons (44%) FY25F. The one-off adjustment in mortgage yield added 9bps to NIM, yet it still declined by 22bps yoy to 4.7%, driven by a 33bps increase in CoF. While consumer loan yield rose to 9.0% (from 8.2% in FY24), other segments aside from commercial posted flat to lower yields. Asset quality held firm, with CoC at 0.9% (below the 1.0–1.2% normal range) and LaR improving to 6.9% (-84bps yoy). NPL coverage stood at 246%, still higher than the bank’s comfortable level of 230%. Write-offs also remained low at Rp1.3tr in 2Q25, below the Rp1.5tr low base in 1Q25.
2Q25 miss from one-off cost spike
BMRI reported a 2Q25 net profit of Rp11.3tr (-15% qoq, -19% yoy), mainly impacted by a sharp opex jump. The opex rose to Rp17.5tr (+15% qoq, +35% yoy) due to a one-off adjustment in Jun25, pushing the CIR to 48%. However, the impact is expected to taper off in the coming months. On a positive note, consumer loan yield was lifted by the adjustment, pushing 2Q25 yield to 7.86% (from 7.64% in 1Q25). Despite strong loan growth, provisions remained resilient at Rp3.4tr, with CoC easing to 0.8%.
Forecasts trimmed on more conservative FY25 Guidance
Management revised down FY25 loan growth to 8–10% (from 10–12%) and NIM to 4.8–5.0% (from 5.0–5.2%), reflecting recent pressures. CoC guidance was also trimmed to 0.8–1.0% for FY25, but mgmt. expects it to normalize to 1.0–1.2% in FY26F. CIR is expected at ~45% in FY25F due to the one-off, before reverting to 40–42% next year. Based on these changes we trimmed our FY25/26/27F net profit estimates by 9.9/13.4/10.9% on higher CIR.
Maintain Buy with a lower TP of Rp5,000
We maintain our Buy rating with a lower TP of Rp5,000, based on -0.5SD 5-year average CoE and changed forecasts. This valuation, which we derived from GGM with a 12.4% CoE (11.9% prev.) and a 17.3% FY25F ROE (19.1% prev.), implies an FV PBV of 1.5x (1.8x prev.). Risks to our view include possible asset quality deterioration.
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