Bank Rakyat Indonesia (BBRI IJ)

1Q26 Earnings: In line; Resilient NIM and lower CoC Supporting Bottom Line

• BBRI posted a net profit of Rp15.5tr in 1Q26 (–2% qoq, +14% yoy), forming 26% of FY26F consensus (in line).
• CoC softened to 3.2% (-44bps qoq, -29bps yoy), still within target of 2.9-3.2%, with broadly stable NPL and improved yoy LaR ratio.
• BBRI currently trades at 1.4x FY26C PBV, at -2.0SD of its 5-year mean, reflecting the challenging macro-economic conditions.

Solid earnings driven by NIM improvement and fee-based income

BBRI posted a net profit of Rp15.5tr in 1Q26 (–2% qoq, +14% yoy), forming 26% of FY26F and in line with expectations, supported by stronger operating profit and lower provisions. NII grew 2% qoq and 12% yoy to Rp40.2tr, driven by 14% yoy loan growth, while NIM remained relatively stable at 7.8% (–11bps qoq, +18bps yoy) as lower CoF partly offset the decline in EA yield. Other operating income declined 15% qoq but still grew 2% yoy to Rp14.2tr, reflecting strong gold business performance but a weaker recovery income due to claim process integration with insurance, which has been normalized. Opex rose 11% yoy, mainly driven by subsidiaries, particularly Pegadaian.

Wholesale driven loan and deposit growth

Loans grew 3% qoq and 14% yoy to Rp1,562tr, driven mainly by corporate (+42% yoy) and commercial (+60% yoy), while micro, SME, and consumer segments recorded relatively modest growth. Micro loan growth of 5% yoy was driven by Pegadaian (+62% yoy), while bank-only micro declined and PNM remained flat. Deposits rose 6% qoq and 9% yoy to Rp1,555tr, supported by strong wholesale deposit growth (+17%).

Moderating growth and gradual improvement in quality in FY26F
Provision expenses declined 4% qoq and 1% yoy, bringing CoC down to 3.2% (–44bps qoq, –29bps yoy), in line with guidance of 2.9–3.2%. Asset quality showed divergence, with improvements in corporate but pressure in micro, SME, and consumer segments. Under a stressed macro scenario, BBRI sees a scenario of NPL rising 2–3% and CoC to increase by 35–75bps.

Below-mean valuation amid challenging macro condition

BBRI’s current PBV valuation stands at 1.4x, which is at -2.0SD below its 5-year avg, reflecting the challenging business conditions, macro-economic outlook, and uncertainties in the government’s program. Management remains optimistic in resolving the Kupedes vintage loan but is cautious on the global economic uncertainty.

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