BBRI booked net profit decline of 11.5% YoY to Rp26.3 trillion in 6M25. Interest Income grew 2.6% YoY, followed by Net Interest Income, which increased 2.8% YoY to Rp73.3 trillion in 6M25.

Although it was followed by an increase in provision expense of 25.8% YoY in 6M25, thus suppressing BBRI’s net profit growth. BBRI’s provision expense has increased in the last two years (3M25: 14.6% YoY, 2024: +28.6% YoY, 2023: +10% YoY).

Current Account Savings Account (CASA) grew 10.6% YoY to Rp877 trillion in 6M25.In terms of liquidity, the Loan to Deposit Ratio decreased from 86.59% in 6M24 to 84.97% in 6M25. Despite the tightening of liquidity in the banking industry, BBRI was able to maintain its liquidity in line with BBRI’s efforts to maintain asset quality.

Gross Non-Performing Loans (NPL) increased 20 bps QoQ (0 bps YoY) to 3.2% in 6M25. The gross NPL remains above the management target of <3% for FY25F.

Therefore, BBRI increased its provision expense by 25.8% YoY to IDR 23.3 trillion in 6M25. However, BBRI’s NPL coverage ratio has decreased and remained lower than in the last three years.

Moderate loan growth to improve asset quality. BBRI’s total loans grew 6% YoY to Rp1,417 trillion in 6M25.We estimate BBRI can book interest income growth of around 2.5% for FY25F, but with a 3% decrease in net profit.

Based on BBRI’s performance, using the Dividend Discount Model, we maintain our BUY rating for BBRI with a lower target price of Rp4,705/share (12.19x expected P/E) from the previous Rp5,325/share and a relative valuation below 2.27x the 5-year average P/E with a potential upside of 26.82%.

By PHINTRACO SEKURITAS | Research
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