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Net profit -9.4% QoQ, -13.9% YoY on higher provisions; CoC rose to 3.5%. In 1Q25, BBRI reported consolidated net profit of IDR 13.7 trillion (-9.4% QoQ; -13.9% YoY), in line with our estimate (23.1% of FY25F) and consensus (23.4%). The decline was mainly attributed to 14.6% YoY increase in provision expenses. Net interest income (NII) fell to IDR 35.6 trillion (-1.7% YoY), as NIM slipped to 7.7% (4Q24: 7.8%) due to 40bps QoQ drop in loan yields, despite 20bps QoQ improvement in CoF (3.5%). Loans and financing rose 5.0% YoY to IDR 1,373.7 trillion, driven by strong 21.1% YoY growth in medium segment. Micro loan growth, however, was quite modest at 1.5% YoY, reflecting the bank’s focus on assets quality and recovery efforts. Cost of credit (CoC) rose to 3.5% (4Q24: 2.8%), exceeding the bank’s guidance of 3.0–3.2%, primarily due to elevated net downgrades in the micro and small lending portfolios. In line with IDR depreciation and Indonesia’s economic slowdown, assets quality deteriorated slightly, with NPL ratio ticking up to 3.0% and LAR rising to 11.1% (4Q24: 10.7%).
Micro strategic initiatives to offset declining loan yields and lower provisions. In 2025F, BBRI plans to reinforce its micro loan segment by enhancing risk management and operational processes in order to better manage provisions ahead. Key initiatives include improved pre-screening, early warning systems, region-based risk assessments, and adaptive loan limits. The bank also plans to revamp its recruitment and talent development strategy to support micro operations, while expanding its higher-yielding Kupedes products (yielding 7–10%) to help offset the decline in loan yields observed in 1Q25.
2025F guidance: 7-9% loan growth (2024: 7.0%), CoC at 3.0-3.2%. BBRI maintains its FY25 loan growth target at 7–9% (vs. 7.0% in 2024). To achieve this, the bank plans to shift its lending focus from Corporate to Consumer segments while boosting retail funding to support margins. NIM is projected to improve to 7.3–7.7% (FY24: 7.74%), the highest among peers under our coverage, supported by CASA ratio of > 65%. CoC is expected to stay flat at 3.0–3.2% in FY25 (vs. 3.23% in FY24), reflecting provisioning requirements for micro and small business portfolios. Regarding NPLs, the bank intends to maintain its coverage ratio above 200% and Loan Loss Reserve (LLR) above 6%.
Retain HOLD and TP of IDR 4,000 (2.0x PBV). We retain our HOLD rating on BBRI with TP of IDR 4,000/share, reflecting 2025F PBV of 2.0x and translating to limited upside potential of 3.9%. While assets quality improvement remains a key priority amid modest loan growth in 2025, we believe the new management’s retail expertise will bolster near-term funding initiatives through BRImo and digital upgrades, payroll acquisition, and deeper integration across segments and subsidiaries, helping to grow low-cost funding. Key downside risks include slower economic recovery, weaker-than-expected NIM and loan growth, rising credit costs as well as higher operating expenses.
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
The company offers a variety of financial services, including equity, debt and derivative securities brokerage services, research and portfolio management, asset management and capital market services, as well as a range of other investment solutions. Samuel Sekuritas Indonesia is also a leader in providing financial education and training, and has established itself as a leading provider of investor relations services.
The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
In addition to its financial services, Samuel Sekuritas Indonesia also offers a range of other services, such as corporate finance and advisory services, mergers and acquisitions, and venture capital.
