1Q25 Results: In line with ours and cons

Net profit up +4.4% QoQ/+1.0% YoY; CoC  down to 0.9% (4Q24: 1.5%). In 1Q25, BBNI reported consolidated net profit of IDR 5.4 trillion (+4.4% QoQ, +1.0% YoY), in line with our forecast (24.4% of FY25 target) and consensus (23.2%). The growth was driven by loan expansion of 10.1% YoY and financing to IDR 765 trillion, which allowed NII to rise to IDR 9.8 trillion (+4.7% YoY) helped also by 16.0% YoY rise in corporate loans, though medium segment saw -3.3% YoY decline. NIM continued to face pressure, dropping to 3.9% (-55bps QoQ, -7bps YoY) due to high CoF at 2.75% (+10bps QoQ) and lower blended loan yield of 7.4% (-50bps QoQ, -10bps YoY). CoC fell to 0.9% (compared to 1.0% in 1Q24), still within the guidance range. NPL ratio remained steady at 2.0%, while loan-at-risk (LAR) ratio rose to 10.9%, up from 10.3% in 4Q24.

Eyeing growth in high-yield SME segments to offset NIM pressure ahead. Going forward, BBNI plans to capitalize on opportunities in SME segment, which offers higher yields and could help offset NIM pressure, supported by enhanced risk management practices. Additionally, management aims to further increase CASA ratio (1Q25: 70.5%) as the bank’s new mobile banking app, “Wondr” by BBNI (released in 3Q24), continues to drive higher customer engagement and transaction volumes (average transaction value increased 41%).

2025F guidance: Moderate loan growth of 8-10%, 1% CoC. BBNI stated that it would not adjust its 2025F guidance, reiterating that loan growth is expected to moderate to 8–10% (FY24: 11.6%) amid potential economic slowdown in 2025. We expect NIM to improve moving forward, as the bank plans to allocate more loans to high-yielding assets and increase its CASA ratio. For 2025F, NIM is projected to rise modestly to 4.0–4.2%, up from 3.9% in 1Q25. Meanwhile, 1Q25 CoC of 90bps is expected to increase slightly in the coming quarters, matching BBNI’s full-year guidance of 100bps.

Retain HOLD with TP IDR 4,500 (1.1x PBV) on liquidity concerns (LDR: 93.1%). 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. We maintain HOLD rating for BBNI with target price of IDR 4,500/share, reflecting 2025F PBV of 1.1x, as liquidity remains our key concern for the bank in the short term with its 1Q25 LDR reaching 93.1%, keeping CoF elevated in the current environment. Key downside risks to our call include higher-than-expected CoC and CoF, which would further compress NIM. Upside risks include stronger-than-expected loan growth and improved NIM.