3Q25 Results: QoQ Recovery

YoY profit still down; NIM under pressure at 4.89% on intense competition. In 3Q25, BMRI booked consolidated net profit of IDR 13.3tn (+17.9% QoQ, -14.2% YoY), bringing 9M25 earnings to IDR 37.7tn (-10.2% YoY), broadly in line with our forecast (74.8% of FY25F) and consensus (74.8%). Operating expenses rose 25.3% YoY in 9M25, mainly driven by higher personnel and G&A costs, with one-off post-audit adjustments (~10–12% of total opex) continuing to push CIR up to 44.6%. Despite cost pressures, NII grew +4.9% YoY, supported by +11% YoY loan growth, primarily from wholesale segment, while retail growth was intentionally moderated. Deposit costs came in at 2.43% in 9M25 (Sep MTD: 2.33%), alongside +5.97% YoY CASA growth and +13.0% YoY total deposit expansion. However, with loan yields easing to 7.67% (-8bps QoQ) amid intensifying competition, 3Q25 NIM slipped slightly to 4.89% (2Q25: 4.92%).

Prioritizing ‘safe’ sectors and ecosystem-driven value chain growth. BMRI continues to focus on low-risk sectors and ecosystem/value-chain lending, emphasizing growth in corporate (+8.2% QoQ) and commercial (+1.9% QoQ), with added exposure to energy, downstream, and telecommunications. Retail disbursement remained muted by design, with micro KUR (+2.9% QoQ) and mortgages (+0.8% QoQ) offsetting declines in auto, SME, and payroll loans. Management aims to further strengthen transactional CASA through these initiatives, while “loan-solo-deposit” strategy has helped align loan and deposit growth, supporting liquidity (LDR 91%) and ongoing CoF improvement.

2025F guidance: loan growth 8–10%, NIM 4.8–5.0%, CoC 80–100bps. Management maintained its FY25 loan growth target at 8–10%, with 3Q25 trends remaining on track, and continues to guide for NIM at 4.8–5.0%, as lower deposit costs are expected to offset loan-yield pressure. Assets quality stayed manageable, with CoC improving to 73bps (vs. 77bps in 1H25), LAR declining to 6.48%, and consolidated LAR coverage at 44.7%. FY25 CIR is projected at around 45% (due to one-off cost adjustments) but is expected to normalize to ~42% by FY26, as expense growth moderates to low single digits. The dividend payout ratio is expected to remain at ~60%, with IDR 1.2tn buyback authorization in place through March 2026.

Maintain BUY rating with TP of IDR 5,100 on potential NIM recovery ahead. At this stage of the market cycle,  we retain our BUY rating on BMRI with TP of IDR 5,100/share (PBV 26F: 1.46x), offering 14.1% upside, particularly given YTD underperformance. Post-3Q25 results, we leave our net profit estimate unchanged and expect NIM to recover next quarter as lower CoF and strong coverage ratios cushion asset quality risks. Key downside risks include weaker economic recovery (raising NPL risk), further NIM compression, and slower loan growth and/or higher credit costs.