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Strength
1H24 loan growth of 11.2% remained within FY24 guidance range of 10-12%, despite a slowdown in microloan growth; strong recovery income growth of 50.5% YoY supported PPOP growth of 11.7% YoY
Opportunity
BBRI still has ample room to grow its Kupedes product, which offers higher yields of up to ~20%, offsetting the increase in CoF (which rose to 3.5%)
Weakness
1H24 cost of credit (CoC) remained relatively high at 3.48% (FY24 guidance: 3.0%), as BBRI front-loaded provisions for micro and small business loans; cost of funds (CoF) increased 10bps QoQ to 3.53% in 2Q24 due to higher non-deposit funding costs
Threat
NIM (2023: 7.95%, 2Q24: 7.64%, 2024F: 7.6%) and NPL (3.05% in 2Q24) pressure may persist as the bank plans to restructure up to IDR 15-20tn of microloans, which could later be reclassified as NPLs, potentially raising CoC further
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