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-7.8% QoQ, -8.5% YoY drop in net profit due to IFRS 17 impact. In 2Q25, BBRI posted consolidated net profit of IDR 12.7tn (-7.8% QoQ; -8.5% YoY), bringing 1H25 earnings to IDR 26.3tn (-11.5% YoY), falling short of our estimate (43.9% of FY25F) and consensus’ (45.0%). The earnings softness was mainly driven by implementation of IFRS 17 at BRI Life, which shifted net premium and insurance services income to -IDR 1.0tn loss (vs. +IDR 1.1tn in 1Q25). Under IFRS 17, premiums are no longer booked upfront and operating costs are allocated to insurance liabilities, inflating other expenses. NII rose to IDR 37.4tn (+4.4% QoQ; +7.6% YoY) on steady loan growth and stable margins, with consolidated NIM at 7.8% (1Q25: 7.7%). Total loans increased +6.0% YoY to IDR 1,416.6tn, supported by strong growth in corporate (+15.6% YoY) and consumer (+9.4% YoY) segments, while micro lending remained muted at +1.6% YoY as the bank maintained its focus on asset quality and recoveries. Cost of Credit (CoC) stayed elevated at 3.4% (1Q25: 3.5%), slightly above initial guidance of 3.0–3.2%.
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 with 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 driven by consumer and corporate segments, particularly in agriculture and trading, while micro lending, including Kupedes, may remain subdued. On asset quality, management is maintaining a cautious stance, with CoC projected at 3.3–3.4% 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 better manage Non-Performing Loans (NPLs).
Revised 2025 guidance on higher asset-downgrade risk. BBRI is maintaining its FY25 loan growth target at 7–9% (vs. 7.0% in 2024) with stronger focus on consumer and corporate segments. NIM is expected to remain within 7.3–7.7% (FY24: 7.7%), supported by stable CASA ratio (>65%) and selective loan repricing. Management slightly raised its CoC guidance to 3.3–3.4% (from 3.0–3.2%; FY24: 3.2%), reflecting ongoing pressure from micro and ultra-micro portfolios. Assets quality remains stable with consolidated NPL at 3.0% and LAR at 10.8%, supported by > 200% coverage levels. Key risk controls include tighter underwriting standards, enhanced early warning systems, and accelerated restructuring for vulnerable micro borrowers to help contain credit costs.
Retain HOLD with TP of IDR 4,000 (1.9x PBV). We maintain our HOLD rating on BBRI with TP of IDR 4,000/share, implying 2025F PBV of 1.9x and limited upside potential of 5.8%. While assets quality improvement remains key priority amid modest loan growth in 2025, we expect the new management’s retail expertise to strengthen near-term funding initiatives through BRImo enhancements, payroll acquisitions, and deeper integration across segments and subsidiaries. Key downside risks: slower-than-expected economic recovery, rising credit costs, higher operating expenses as well as weaker NIM and loan growth.
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
The company offers a variety of financial services, including equity, debt and derivative securities brokerage services, research and portfolio management, asset management and capital market services, as well as a range of other investment solutions. Samuel Sekuritas Indonesia is also a leader in providing financial education and training, and has established itself as a leading provider of investor relations services.
The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
In addition to its financial services, Samuel Sekuritas Indonesia also offers a range of other services, such as corporate finance and advisory services, mergers and acquisitions, and venture capital.
