Bank Rakyat Indonesia (BBRI IJ)
2Q25 Earnings Miss: Challenging Macro Continue to Weigh Amid Strong Subsidiary Performance
- BBRI’s 2Q25 net profit fell 8% qoq/ 9% yoy, bringing 1H25 NP to Rp26.3tr (-12% yoy), below cons est. at 45% of FY25F, on cost pressure.
- Management maintained its NIM guidance at 7.3-7.7%, loan growth at 7-9% (likely at lower end), and CoC at 3.0%-3.2% (likely at higher end).
- BBRI currently trades at 1.7x FY25C PBV, at -1SD of its 5-year mean, reflecting the challenging micro business conditions.
1H25: Earnings Miss on Provisions and Margin Pressure
BBRI posted a 12% yoy decline in 1H25 net profit to Rp26.3tr, below consensus expectation (45% of Cons FY25F), due to a 26% increase in provisions. The spike partly reflected a low base in 1H24, which included a ~Rp4.2tr one-off non-loan provision reversal tied to a construction SOE restructuring. NIM narrowed to 7.6% (from 7.8%) as loan yields dropped 27bps to 13.1%, while CoF remained contained at 3.5% (-8bps yoy). Opex rose 5.7% yoy, driven by Pegadaian and PNM, with Pegadaian’s personnel expenses increasing on higher incentive and bonus payouts. Net premium income fell 70% yoy following PSAK 117 adoption, which deferred recognition and reclassified related costs.
2Q25: Margin Rebound but Profit Under Pressure
BBRI booked 2Q25 net profit of Rp12.6tr (-8% qoq, -9% yoy), weighed by a 5% rise in opex and 14% decline in other operating income. NIM rose 7bps qoq to 7.7%, supported by a 49bps higher loan yield of 13.3% from Pegadaian’s contribution, SME reclassification, and a one-off gain reversal. CoC eased qoq to 3.3% (-19bps qoq, +19bps yoy), while NPL remained steady at 3.0%. However, Micro, Consumer, and Medium NPLs rose to 3.86% (+91bps), 2.25% (+12bps), and 2.54% (+79bps), respectively. CASA improved to 65.5% (+233bps yoy), though LDR fell to 95.6% as deposit growth (+4% qoq, +7% yoy) outpaced loan growth (+3% qoq, +6% yoy). Corporate and Consumer loans rose 15.6% and 9.4% yoy, respectively, while Micro loans grew just 1.6%.
FY25 Guidance Remained Unchanged
Management maintained FY25 guidance: NIM at 7.3–7.7%, loan growth at 7–9% (likely at the lower end), CoC at 3.0–3.2% (likely at the higher end), and NPL at around 3%. BBRI’S future performance will hinge on its ability to control provisioning, defend margins, and manage funding cost amid continued liquidity and asset quality challenges.
Improving gold business but micro remains challenging
BBRI’s current PBV valuation stands at 1.7x, which is at -1.0SD below its 5-year avg, driven by the challenging business conditions and uncertainties in government’s program. Management remained optimistic in resolving the vintage loan but is cautious on the current economic conditions.
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