Bank Syariah Indonesia (BRIS IJ)
FY26 Outlook: Earnings Supported by Gold Business Amid Intensifying Competition in Wholesale
- We forecast FY26F net profit of Rp8.5tr (+11.5% yoy), supported by robust loan growth (+14% yoy) and resilient NIM (+13bps).
- While wholesale loan yield could weigh on NIM, the robust consumer loan, supported by gold business, will provide buffer for NIM.
- Maintain Buy rating with a higher TP of Rp3,200. Risks to our view include slower gold financing growth and deteriorating asset quality.
Expect a solid double-digit loan and bottom line growth
In FY26F, we expect loan growth to remain stable at 14.3% (vs. 14.2% in FY25F), with the LDR rising to 88.7%, supporting a firmer NIM. We project a 13bps higher NIM in FY26F, driven by an 11bps lower CoF and a 7bps increase in EA yield as we expect the gold business prospect to remain robust in FY26F. We estimate CoC at 1.0% in FY26F and consequently expect FY26F net profit to reach Rp8.5tr (+11.5% yoy). As a result, we project ROE to remain steady at 15.7%.
Consumer-driven growth while maintaining its wholesale loans
In the gold ecosystem, BRIS continues to anchor all buy-sell activity within its platform, sourcing from ANTM when supply is stable but retaining flexibility to purchase from customers when issues arise. The digital gold business is supported by roughly 50kg of inventory. However, while gold-financing could rise, wholesale volume may moderate. We expect gold to drive consumer loan growth (+16% yoy), offsetting the lower growth of wholesale (+9% yoy). Moreover, gold-related businesses would continue to provide robust fee-based income as customer base widens, and transaction frequency increased.
Stronger profitability anchored by robust loan growth and better NIM
Management guides FY26F financing growth of 14-16%, broadly in line with FY25F, though gold business expansion is contingent upon supply availability. CoC is projected to hold stable, while funding costs should ease on the back of improved system liquidity. Overall, NIM should remain robust, anchored by solid financing expansion, favorable LDR level, and steady yield in gold business. On the flip side, potential lower yield amid intensified competition in wholesale segment in FY26F could weigh on NIM.
Maintain Buy rating with a higher TP of Rp3,200
We revised FY25/26F earnings by -1.4%/-2.0% to reflect lower NIM assumptions. We maintain our Buy rating with a higher TP of Rp3,200 after rolling forward our valuation to FY26F, which includes a higher BVPS. Our TP is derived using GGM, based on a 7.9% CoE and a 15.7% FY26F ROE, implying an FV PBV of 2.6x. Key risks to our call include slower gold financing growth, softer fee-based income, and weaker asset quality.
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