3Q25 Results: Simply in-line

 

3Q25 Results: Simply in-line Resilient NIM supported by stable loan yield of 13%. In 3Q25, BBRI posted consolidated net profit of IDR 14.9tn (+19.9% QoQ; -4.5% YoY), bringing 9M25 earnings to IDR 41.2tn (-9.1% YoY), in line with our (76.1%) and consensus estimates(73.0%). NII experienced solid growth to IDR 37.7tn (+5.3% YoY), supported by resilient lending yields (~13%) and higher contribution from Pegadaian and PNM, which accounted for 25% of BBRI’s 9M25 consolidated earnings (vs. 21% in previous quarter). NIM moderated slightly to 7.7% (flat QoQ; -20bps YoY), consistent with management’s upper-end guidance. PPOP came in softer at IDR 23.5tn (-6.8% YoY), weighed down by muted fee and recovery income (+0.4% YoY) and higher operating expenses. Loan growth reached +6.3% YoY (+1.5% QoQ) to IDR 1,428tn, with consumer (+9.7% YoY) and corporate (+16% YoY) segments outpacing micro, as BBRI maintained disciplined approach to portfolio clean-up and prudent underwriting. Asset yields remained strong, particularly in micro loans (18.1%), while digital momentum continued to accelerate (BRImo users climbed to 44.4mn (+19.4% YoY) and QRIS transaction volumes surged 133% YoY). Focusing on funding and credit quality management. BBRI’s new management is sharpening its focus on funding by driving CASA growth through emerging mass-affluent customers, revitalizing merchant partnerships, and enhancing digital engagement via revamped BRImo platform. The initiative aims to improve user experience and accelerate low-cost deposit mobilization to reduce CoF. Loan growth is expected to be led by consumer and corporate segments, particularly in agriculture and trading, while micro lending, including Kupedes, may remain subdued. On assets quality, management is maintaining a cautious stance with CoC projected at 3.2–3.3% amid pressures from micro and restructured loans. To support this strategy, the bank plans to implement stricter monitoring, disciplined execution, and front-loaded write-offs to strengthen non-performing loan (NPL) management. 2025 guidance remains unchanged. Management maintained its FY25 loan growth guidance at 7–9% with loan mix expected to remain tilted toward consumer, corporate, and gold-backed lending (Pegadaian and PNM currently contribute 25% of consolidated micro exposure). Kupedes and overall micro loan growth may stay muted in near term as BRI prioritizes portfolio clean-up and tighter underwriting, but are projected to recover modestly (~+1% YoY) in 2026F and normalize to 9–10% p.a. over the longer term. NIM is expected to remain stable within 7.3–7.7%, supported by >65% CASA ratio and more selective loan repricing strategy. Meanwhile, CoC is now projected to reach the upper end of BBRI’s guidance at 3.2–3.3% (from 3.0–3.2%), reflecting elevated write-offs and lingering micro pressure, though it is expected to ease to 2.9–3.2% in FY26 as legacy exposures wind down. Retain BUY with limited upside of 12.5% given ongoing micro clean-up. We maintain our BUY rating on BBRI with TP of IDR 4,400/share, implying 2026F PBV of 2.0x and 12.5% potential upside, although near-term earnings are constrained by ongoing micro clean-up, subdued non-interest income, and higher credit costs. Nevertheless, our positive view is backed by BBRI’s superior funding franchise, digital leadership, and capital flexibility, providing strong support for core returns and brand value. Key downside risks: slower-than-expected economic recovery, rising credit costs, higher operating expenses, and weaker NIM/loan growth.