2Q25 Results: No Major Surprises

Solid 2Q25 results underpinned by sustained loan growth and robust CASA. In 2Q25, BBCA reported consolidated net profit of IDR 14.9tn (+5.1% QoQ, +6.2% YoY), in-line with our estimate (50.7% of FY25) and consensus’ (49.7%). The bank’s strong performance was mainly driven by solid net interest income (NII) of IDR 21.4tn (+1.7% QoQ, +6.9% YoY) thanks to robust loan expansion (+12.9% YoY, +1.9% QoQ), particularly from corporate (+16.1% YoY) and commercial segments (+12.6% YoY). Deposit growth stood at 5.7% YoY, underpinned by stronger CASA deposits (+7.3% YoY), leading to stable 2Q25 NIM of 5.8%.  Nevertheless, CoC stayed elevated at 0.5%, exceeding the initial guidance of 0.3%, as NPL ratio edged up slightly to 2.2% (1Q25: 2.0%), mainly due to downgrades in SME and consumer segments. However, LAR improved to 5.7% (vs. 6.0% in 1Q25).

Pushing loan growth in key segments while maintaining assets quality. Going forward, BBCA plans to capitalize on loan growth opportunities stemming from SME and consumer sectors, particularly in downstream industries and renewable energy. In addition, the management aims to boost CASA by improving its ecosystem and strengthening integration between online and offline channels. Despite the potential to lift loan yields, maintaining good assets quality remains BBCA’s top priority. Any yield adjustments will be implemented cautiously to ensure credit quality is not compromised.

Revised 2025 guidance reflecting cautious optimism. BBCA retains its moderate 2025F loan growth guidance at 7–8% (FY24: 13.8%), which is likely to be exceeded in our view given 13.8% 6M25 credit expansion. Despite slight NIM improvement of 10bps YoY to 5.8%, in line with full-year guidance at 5.7–5.8%, supported by high CASA ratio of 83.4% (industry average ~65%). CASA growth of 7.3% YoY highlights sustained strength in the bank's transaction banking and digital ecosystem. The bank revised its CoC guidance to 30–50bps (previously 30bps), indicating ongoing caution.

Top pick in the sector with TP of IDR 10,000 (4.2x PBV) - BUY. We like BBCA due to its excellent asset quality, high CASA franchise and the sector’s highest ROE of 25.2% (FY24: 24.8%). This superior return is supported by disciplined operating expense management with FY25 CIR target of 33–34%. BBCA's leading digital bank status — evident from the 78% increase in mobile and internet banking transaction volumes over the past three years coupled with the rollout of new features such as multi-currency wallets and NFC payments — continues to support sustainable CASA growth. However, we have cut our TP to IDR 10,000 (2025F PBV of 4.2x) on sector relative valuation as other banks derate (sector PBV: 2.5x). Key downside risks: rising NPLs and prolonged NIM pressure.