3Q25 Results: No major surprises

Fee-based income supports earnings; NIM stabilizes as CoF improves. In 3Q25, BRIS reported consolidated net profit of IDR 1.8tn (-1.9% QoQ; +6.7% YoY), broadly in line with our estimate (74.7% of FY25F), but slightly on the soft side of consensus (71.8%) given near 3% share price drop in the past 5 trading days. PPOP growth remained solid on the back of strong non-interest income (+64.9% QoQ; +19.4% YoY), mainly driven by digital gold-related fees, which continued to outperform and reached nearly IDR 1tn in 9M25 (+52% YoY). NIM was stable QoQ at 5.6%, supported by lower funding costs amid ample liquidity and steady inflows from Hajj savings. Financing grew +2.6% QoQ and +13% YoY to IDR 300tn, slightly below the annual target, while deposit growth accelerated (+8% QoQ; +16% YoY), with CASA ratio at 59% (vs. 61% in 2Q25); the slip was caused by temporary dilution from MoF placements. Assets quality continued to improve, with FAR declining to 6.81% (-38bps YoY), NPF stable at 1.4% (mainly in the consumer segment), and CoC steady at 0.87% as of 9M25.

Gold ecosystem gains traction, sustaining non-interest income momentum. The bank’s two engines (Islamic and bullion banking) continued to drive new customer acquisition and diversify fee income streams, with ~260k new Beyond app users actively transacting in digital gold. Fee-based income now contributes over 20% of total net interest income, primarily driven by digital gold transactions and commissions, which have surpassed gold lending income. Gold financing rose +11% QoQ and +73% YoY (installment loans: +14% QoQ; +106% YoY), lifting its share to 6.2% of total loans. In addition to yield support from gold and payroll financing, management also highlighted productivity gains, with revenue per branch and revenue per employee both recording positive growth amid higher digital adoption.

2025F guidance: 14–16% financing growth led by gold/consumer. BRIS reiterated its 2025F financing growth target of 14–16%, driven by continued expansion in gold and consumer lending. Management noted, however, that near-term growth could face temporary headwinds from tight domestic gold supply following ANTM’s import halt. Supported by improving funding costs and higher yield contribution from gold and payroll financing, NIM is expected to recover moderately through 4Q25 and into FY26. CoC is projected to remain below 1%, consistent with YTD trends, reflecting continued discipline in provisioning. Meanwhile, the bank guided for CIR to stay temporarily elevated in the near term due to ongoing IT and infrastructure investments, with normalization expected as digital scale efficiencies begin to materialize.

BUY with TP of IDR 3,100 (2.5x PBV) on robust financing growth. We reiterate our BUY rating on BRIS with 12-month target price of IDR 3,100/share, reflecting 2026F PBV of 2.5x and potential upside of 20.2%. We expect sustained growth in gold lending, projected to reach 8% of total financing by end-2025F (current: 6.2%) to provide further support for NIM improvement in the coming quarters. Key downside risks include slower-than-expected economic recovery, weaker NIM or financing growth, and higher credit costs relative to expectations.