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Better Results to Come on Lower Rates
2Q25 Net profit -11.3% QoQ, +24.9% YoY; NIM up to 4.4% (1Q25: 3.6%). In 2Q25, BBTN posted consolidated net profit of IDR 802 bn (-11.3% QoQ, +24.9% YoY), bringing 1H25 earnings to IDR 1.7 tn (+13.6% YoY), slightly below our forecast (46.2% of FY25F target) but came in-line with consensus (52.7%). The result was mainly driven by 55.1% YoY surge in NII to IDR 9.3 tn, as NIM expanded to 4.4% (+80bps QoQ, +139bps YoY) due to asset yield which rose +104bp yoy (+84bp qoq) from the change in accounting treatment. Total loans reached IDR 376 tn (+6.8% YoY), led by 7.4% YoY growth in mortgages and 18.4% YoY expansion in corporate loans. While gross NPL remained stable at 3.3%, LAR declined to 20.2% from 21.2% in 2Q24, indicating early signs of improvement despite CoC rising to 2.0% (1Q25: 1.1%) as the bank builds provisions to improve NPL coverage to exceed 120% by end-2025F (115% in 1H25).
Housing KUR to unlock growth. BBTN stands to benefit from the newly launched housing KUR program (Permenko No.13/2025), which complements FLPP by offering subsidized loans to both developers (supply side) and homebuyers (demand side). For borrowers, the scheme provides IDR 500 mn loans at 6% interest, while developers can access up to IDR 20 bn in working capital or investment loans. Supported by BBTN’s deep mortgage network and strong track record in subsidized housing, management expects to capture dominant share of the scheme, potentially financing 50–100k units in 2026. While the program offers higher yield, execution risk remains if NPLs exceed 5%, triggering disbursement suspensions. Nonetheless, it offers new, scalable growth lever within BBTN’s core mandate.
Guidance revised: higher loan and deposit growth, but CoC raised to >1.5%. BBTN raised its FY25 loan growth guidance to 7–9% (prev.: 7–8%), supported by FLPP housing subsidy program and housing KUR scheme. Total 2025 FLPP disbursement is set at 350k units with IDR 31 tn budget, while further upside could come from potential hike in subsidized mortgage rates to 6–7% (awaiting regulation), which could lift BBTN’s NIM further. Deposit growth guidance was lifted to 8–10%, supported by a more balanced funding mix. However, management raised CoC guidance to >1.5% (from 1.0–1.1%) due to front-loaded provisioning efforts in 1H25 to restore NPL coverage. BTN remains committed to lowering gross NPL to <3.1% by end-2025, with special attention to the IDR 350–500 mn non-subsidized segment where NPL peaked in 1H25.
Upgrade to BUY; TP raised to IDR 1,600 (29% upside) on improving NIM. We upgrade BBTN to BUY (from SELL) with new 12-month TP of IDR 1,600, implying 2025F PBV of 0.48x. Our view is supported by expectations of continued NIM improvement in 2H25 as cost of funds (CoF) gradually declines following BI’s 100bps rate cut and easing SRBI yields. Loan growth may also accelerate on the rollout of housing KUR and sustained FLPP quota (2026: 350k units), which may offer more favorable mortgage yields (up to 6%). While structural challenges in asset quality and funding mix persist, we believe the worst has passed, and the policy environment now offers more upside than risk. Key catalysts include faster FLPP disbursement, successful KUR execution, and CASA recovery. |
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.
