Bank Syariah Indonesia (BRIS.IJ Rp1,700; BUY TP Rp3,100) 1Q26 Earnings: In-line; Solid Gold Financing and Lower Cost of Fund Drove Higher Profitability

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Bank Syariah Indonesia (BRIS IJ)

1Q26 Earnings: In-line; Solid Gold Financing and Lower Cost of Fund Drove Higher Profitability

BRIS delivered a strong 1Q26 NP of Rp2.2tr (+10% qoq, +17% yoy), in line with ours and consensus est. at 26% of FY26F.
Gold financing doubled yoy (+26% qoq) reaching 8.8% of total portfolio, enhancing yield, fee-based income, and lowering CoC.
We maintain BUY rating with an unchanged TP of Rp3,100. Current valuation implies 1.4x FY26F PBV (close to -2SD) and 12.1% CoE.

Solid profits driven by lower cost of funds and contained credit costs

BRIS delivered a strong 1Q26 net profit of Rp2.2tr (+10% qoq, +17% yoy), in line with ours and consensus at 26% of FY26F. ROE reached a new high, partly elevated by new accounting standards. NIM declined slightly by 10bps qoq to 5.7% (+18bps yoy), as lower asset yields were partly offset by lower CoF and supported by high-yield gold products. Despite a 9% qoq decline due to seasonality, opex remained elevated at Rp3.6tr (+20% yoy), driving CIR higher to 50.5% (+189bps yoy), while PPOP growth (+12% yoy) remained supported by higher loan growth and strong fee-based income.

Sound asset quality and higher gold financing drove CoC down

Provision expenses came in lower at Rp602bn (–9% yoy), bringing CoC down to 0.7% (–20bps yoy), below guidance, driven by improvements in wholesale, SME, and auto segments. Asset quality remained robust with NPL stable at 1.80% (–8bps yoy) and strong coverage at 254%, partly supported by accounting changes. Segment-wise, wholesale entered provision release (notably from Angkasa Pura), while gold financing maintained ultra-low risk (CoC ~0.01%). However, retail and consumer segments saw an increase in LaR, mainly due to the Sumatra disasters.

Gold business drove loan and deposit growth

On the balance sheet, loans grew 14% yoy in line with guidance (14–16%), with consumer financing remaining the backbone at 56% of total loans. The gold segment continued to expand rapidly, reaching 8.8% of the portfolio (vs 2.7% in Mar25), with gold financing growing 101% yoy and 26% qoq. Funding also improved, with CASA ratio rising to 62.7% (from 61.0%), supported by strong growth in both CA (+24% yoy) and SA (+20% yoy). Liquidity became more comfortable with FDR at 87.1% (vs 89.9%), while CoF declined significantly to 2.1% (-57bps yoy), supporting margin resilience.

Maintain BUY with an unchanged TP of Rp3,100

We maintain our Buy rating with an unchanged TP of Rp3,100 to reflect our FY26F ROE of 15.3%, still based on a 7.9% CoE, implying an FV PBV of 2.5x. Key risks to our call include slower gold financing growth and income, and weaker asset quality. Tactical (3M) view: N. Despite the in-line 1Q26, macro and global uncertainties may drive volatilities.

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