2Q25 results: Slightly below ours and cons

Net profit down -12.4% QoQ/-12.1% YoY; NIM fell to 3.7%, CoC stable at 1.0%. In 2Q25, BBNI reported consolidated net profit of IDR 4.7tn (-12.4% QoQ, -12.1% YoY), slightly below our forecast and consensus (~45.7% of FY25 estimates). The earnings miss was primarily driven by NIM compression to 3.7% (-20bps QoQ, -30bps YoY), pressured by elevated cost of funds at 2.81% (+6bps QoQ) due to proactive liquidity build-up, while loan yield softened to 7.3% (-10bps QoQ). Loan growth moderated to +7.1% YoY, supported by corporate (+10.4% YoY) and SME (non-KUR) (+9.2% YoY) segments. CASA deposits surged +18.7% YoY on the back of strong traction from digital platforms (“Wondr” and “BNI Direct”), leading to lower LDR of 86.2% (vs. 93.1% in 1Q25). Assets quality remained stable with gross NPL at 1.9% and LAR at 11% (vs. 12.3% in 2Q24), while credit cost stayed flat at 1.0%.

Focusing on SME and CASA to offset NIM pressure. To counter the drop in NIM, BBNI is focusing on SME segment expansion, supported by strengthened infrastructure, strategic SEVP-level appointments, and improved credit scoring execution. The bank is also accelerating transactional CASA growth by leveraging its digital platforms—“Wondr” and “BNI Direct Business”—specifically designed for SME customers. Management expects recovery in the previously soft middle-segment, driven by improved capabilities to tap into corporate and government client ecosystems. With robust liquidity buffers in place, BBNI is well-positioned to support loan growth momentum in 2H25.

2025F guidance revised: NIM cut to 3.8%; loan growth and CoC unchanged.  Management cut FY25 NIM guidance to ≥3.8% (from 4.0–4.2%) amid continued funding cost pressures in highly competitive deposit landscape. Loan growth target remained at 8–10%, supported by solid sectors: F&B, telco, agriculture, manufacturing, and transportation sectors. CoC guidance unchanged at ~1%, underpinned by prudent risk management and stable assets quality.

Earnings downgrades, but retain HOLD with TP of IDR 4,500 (1.1x PBV). At this point, we believe BBNI's new management will continue to improve its risk management system, particularly for wholesale and SME segments, enabling more loan disbursements to high-yielding assets moving forward. However, following this result release, we have slightly lowered our earnings (Figure 4) mainly due to lower NIM assumptions. On recommendation,  we maintain HOLD on BBNI with TP of IDR 4,500/share (1.1x PBV), reflecting ongoing margin pressures and competitive funding landscape. Key upside risks include accelerated CASA accumulation and stronger-than-expected performance from SME and middle segments. Downside risks: prolonged elevated CoF, consumer loan asset quality deterioration, and macroeconomic headwinds.