Bank Mandiri (BMRI.IJ Rp4,970; BUY TP Rp5,500) FY26 Outlook: Cautious on NIM amid Higher Volume but Lower Opex Provide Buffer for Earnings

Stock Code	Last Price	Change	Change %
SINI	8.900	800	9,88%
RISE	9.550	475	5,23%
ARKO	5.150	450	9,57%
AMMN	6.775	425	6,69%
PANI	13.725	425	3,20%
EMAS	4.920	420	9,33%
BALI	1.740	345	24,73%
ARCI	1.715	340	24,73%

Bank Mandiri (BMRI IJ)

FY26 Outlook: Cautious on NIM amid Higher Volume but Lower Opex Provide Buffer for Earnings

We expect BMRI FY26 net profit to rebound by 5.6% yoy to Rp52.3tr from its FY25F low base, driven by higher loan growth and lower opex.
Wholesale loans will remain the growth engine while intensified competition will pose risk on NIM amid potentially lower CoF.
We adjusted our FY25/26F net profit est. by -1.9/+0.2% and maintain Buy rating with a higher GGM-based TP of Rp5,500.

Earnings to rebound from FY25’s low base

We expect BMRI to book net profit of Rp52.3tr in FY26F (+5.6% yoy) after FY25F’s soft NP of Rp49.6tr (-11% yoy). The net profit growth driver is the higher loan growth of 12% yoy, offsetting the 26bps decrease in NIM as competition in the wholesale segment will remain intense in FY26F, and CIR normalization post high base expenses in FY25F. We expect 7% yoy lower opex for FY26F due to the absence of one-off expenses in FY25F, pushing CIR down to 41.9% in FY26F (FY25F: 46.5%).

Wholesale loans to continue drive growth

The bank expects loan growth to stay wholesale-driven in FY26F, while retail momentum should gradually recover as consumer confidence strengthens. In its base-case scenario, the bank aims to keep its yoy FY26F NIM steady at 4.8-5.0%, with potentially lower earning asset yield to be offset by lower cost of funds. BMRI remains confident in its corporate segment asset quality, noting that most of the growth comes from big corporate names, investment loan, and the export-oriented sector.

FY25/26F estimates tweaked by -1.9/+0.2%

We lowered our FY25F earnings by 1.9%, taking into account lower NIM and higher opex, partly offset by lower cost of credit. Our FY26F earnings remain broadly unchanged (+0.2% vs. prev est.) as the downward revisions on NIM and higher CoC were offset by the lower CIR, as we now expect 7% yoy lower opex growth for FY26F (from flat prev.).

Maintain Buy with a higher TP of Rp5,500

We roll forward our valuation to FY26F with ROE of 16.6%, revised CoE of 11.6% (5-year avg.) from 12.2% (-0.5SD) prev. as we see the high opex period is behind us. We maintain our Buy rating with a higher TP of Rp5,500, implying a FV PBV of 1.6x. Risks to our view include possible asset quality deterioration and elevated opex.

… Read More 20251211 BMRI