BMRI posted consolidated 1Q25 results with a profit of IDR13.2tn (-4% q-q; +4% y-y), registering ~23% of our FY25F projection. During 1Q25, the bank observed persistently tight liquidity in the banking sector, while loan repricing remained slow on competition for high-quality borrowers as well as asset recoveries in the prior year. The bank also saw a lower Secured Overnight Funding Rate (SOFR) trend, which affected USD lending rates. We do not expect liquidity in the banking sector to improve for the remainder of 2025F. Still, within the Indonesia banking sector, the bank is one of our top two picks, given that BMRI has the second-lowest funding costs in the sector – primarily reflecting the bank’s growing importance as a transactional bank.
During the call, BMRI management highlighted that BMRI is ready to support government programs such as village cooperatives, free meals and housing programs as long as they are aligned with the bank’s strategy and ecosystem approach, and met the bank’s loan guidelines. While this is still early days, we don’t anticipate much exposure on these, suggesting limited downside risks, if any.
Other key points discussed during the results announcement included the potential for an increase in lending rates. Going into 2H25, management has suggested that loan repricing is highly likely to take place, especially in the commercial and consumer segments. So far, they have emphasized that lending rate repricing will be done mainly for new loans, while adjustments on existing loans are unlikely to be overly aggressive.
1Q25 results summary
Net interest income came in at IDR25.5tn (-6% q-q; +6% y-y) – implying ~23% of our FY25F projection. This brings NIM to 4.8% (-40bp q-q; -30bp y-y), slightly below guidance of ~5.0-5.2%. This was primarily due to flat asset yields of ~7.5% while funding costs rose to 2.8% (flat q-q; +20bp y-y).
PPOP reached IDR22tn (+4% q-q; +4% y-y) – implying ~23% of our FY25F projection. Credit costs (CoC) settled at 93bp (+34bp q-q; -9bp y-y). Overall CoC is in line with management guidance for FY25 of ~1.0-1.2% (or 100-120bp). We do not anticipate much movement in overall asset quality in the coming months.
Profit came in at IDR13.2tn (-4% q-q; +4% y-y), representing ~23% of our FY25F projection. This brings ROAE to 17.6% (-30bp q-q; -700bp y-y) – still healthy, in our view. We expect profit growth to slow in 2025F given current macroeconomic conditions.
On the balance sheet, BMRI reported loan and deposit growth of +17% y-y and +11% y-y, respectively. Loan growth was predominantly from commercial (+21% y-y), corporate (+20% y-y), and subsidiaries (+15% y-y). CASA ratio remained elevated at 72.6% (-220bp q-q; -180bp y-y). However, liquidity remained tight, with headline LDR at 95.6% (-2,700bp q-q; +430bp y-y). Still, arguably, BMRI has one of the largest transactional franchises. Indeed, encouragingly, Savings Accounts (SA) ( the cheapest funding cost) continued to rise +12% y-y in the quarter, while Current Accounts (CA) rose only by +5% y-y, as BMRI cut special deposit rates for customer deposits within CA.
Overall asset quality remained healthy, with loans-at-risk (LAR) at 7.4% (+60bp q-q; -120bp y-y) and acoverage ratio at 53.5%, bringing LLR (Loan-Loss-Reserve) to 3.0% (flat q-q; -70bp y-y). The increase in LAR is due to one nickel-related down-streaming related corps, which still services its obligations. Headline Capital Adequacy Ratio (CAR) stood at 20.7% (flat q-q due to dividend payment; +80bp y-y).
Valuation and risks
We derive our TP of IDR7,600 based on a DuPont analysis, assuming a risk-free rate of 6.5%, an equity risk premium of 7.8%, growth of 11.0%, beta 1.05x and a CAR-adjusted ROAE of 19.5%. We also use 2025F book as reference. The implied multiples at our TP are 2.3x 2025F book and 12.4x 2025F earnings (compared to current multiples of 2.5x and 13.7x, respectively). Key risks to our view are worsening macroeconomic trends, unfavorable regulatory changes, tighter liquidity competition (which would increase funding costs), worsening credit quality (which would raise credit costs), and higher opex.
Fig. 1: BMRI – 1Q25 summary %
Source: Company data, Verdhana research
Fig. 2: BMRI – Quarterly results
BMRI IDRbn
1Q24
2Q24
3Q24
4Q24
1Q25
Q-Q %
Y-Y %
YTD 25
YTD 24
Y-Y %
FY25F
vs FY25F%
Interest income
35,535
36,689
38,412
40,600
39,626
(2.4)
11.5
39,626
35,535
11.5
174,873
22.7
Interest expense
11,349
11,794
12,890
13,446
14,121
5.0
24.4
14,121
11,349
24.4
64,599
21.9
NII
24,186
24,895
25,522
27,154
25,505
(6.1)
5.5
25,505
24,186
5.5
110,273
23.1
Net premium income
543
559
200
1,219
428
(64.9)
(21.2)
428
543
(21.2)
Total NII + Net Premium inc
24,729
25,454
25,722
28,373
25,933
(8.6)
4.9
25,933
24,729
4.9
110,273
23.5
Other income
9,584
9,829
11,378
11,530
11,245
(2.5)
17.3
11,245
9,584
17.3
43,934
25.6
Operating income
34,313
35,283
37,100
39,903
37,178
(6.8)
8.3
37,178
34,313
8.3
154,208
24.1
Total opex
13,112
12,965
13,760
18,774
15,169
(19.2)
15.7
15,169
13,112
15.7
60,804
24.9
PPOP
21,201
22,318
23,340
21,129
22,009
4.2
3.8
22,009
21,201
3.8
93,403
23.6
Provisions
3,596
3,317
2,620
2,396
3,895
62.6
8.3
3,895
3,596
8.3
15,339
25.4
NP
12,702
13,849
15,466
13,766
13,197
(4.1)
3.9
13,197
12,702
3.9
57,387
23.0
Source: Company data, Verdhana research
Fig. 3: BMRI – Balance sheet & ratios
BMRI - B/S structure IDRbn
1Q24
2Q24
3Q24
4Q24
1Q25
Q-Q %
Y-Y %
YTD 25
YTD 24
Equity (incl minority)
268,787
282,332
301,337
313,474
285,178
(9.0)
6.1
6.1
(6.5)
Assets
2,163,785
2,257,801
2,323,991
2,427,223
2,463,659
1.5
13.9
13.9
(0.5)
Loans
1,435,487
1,532,354
1,589,835
1,670,547
1,672,429
0.1
16.5
16.5
2.7
Deposits
1,571,891
1,651,025
1,667,497
1,698,897
1,748,719
2.9
11.2
11.2
(0.3)
CASA
1,168,935
1,238,450
1,231,369
1,271,210
1,269,712
(0.1)
8.6
8.6
(0.2)
TD
402,956
412,575
436,128
427,686
479,007
12.0
18.9
18.9
(0.6)
CASA %
74.4
75.0
73.8
74.8
72.6
BMRI Ratios
1Q24
2Q24
3Q24
4Q24
1Q25
Q-Q %
Y-Y %
NPLs (IDRbn)
16,795
17,775
17,965
18,710
19,567
4.6
16.5
Provisions (IDRbn)
53,018
51,755
50,357
50,392
50,393
0.0
(5.0)
NPL %
1.2
1.2
1.1
1.1
1.2
LLR %
3.7
3.4
3.2
3.0
3.0
NPL cov %
315.7
291.2
280.3
269.3
257.5
Classified loans - bank only
8.6
7.8
7.3
6.8
7.4
Coverage %
55.2
55.3
55.5
56.5
53.5
LARs %
8.6
7.8
7.3
6.8
7.4
LAR Coverage %
55.2
55.3
55.5
56.5
53.5
Margin analysis (%) Bank only
1Q24
2Q24
3Q24
4Q24
1Q25
Q-Q %
Gross Loan Yield
7.7
7.8
7.7
7.8
7.6
Cost of funds
2.5
2.5
2.6
2.7
2.7
Spread
5.2
5.3
5.1
5.1
4.9
NIM
4.8
5.1
4.9
5.0
4.6
Growth and ratios (%)
1Q24
2Q24
3Q24
4Q24
1Q25
Q-Q %
Asset growth y-o-y
13.4
15.0
15.8
11.6
13.9
Loan y-o-y
19.1
20.5
20.8
19.5
16.5
Loan q-o-q
2.7
6.7
3.8
5.1
0.1
Deposit y-o-y
13.0
15.4
14.9
7.7
11.2
Deposit q-o-q
(0.3)
5.0
1.0
1.9
2.9
LDR
91.3
92.8
95.3
98.3
95.6
CASA
74.4
75.0
73.8
74.8
72.6
Efficiency ratio
38.2
38.2
37.3
37.3
37.3
CAR
19.9
20.1
20.7
20.7
20.7
B/S ROAE
18.3
20.1
21.2
17.9
17.6
19.6
18.3
Cost of credit %
1.02
0.89
0.67
0.59
0.93
0.93
6.0
Source: Company data, Verdhana research
Fig. 4: BMRI – DuPont % of assets
BMRI Dupont % of assets
1Q24
2Q24
3Q24
4Q24
1Q25
Int inc
7.2
7.0
7.2
7.7
6.9
Int exp
2.6
2.4
2.7
2.9
2.6
Net Int Inc
4.6
4.6
4.5
4.8
4.2
Non-int inc
1.8
1.8
2.0
1.9
1.8
Total op. inc
6.3
6.4
6.5
6.7
6.1
Non-int exp
2.4
2.3
2.4
3.2
2.5
PPOP
3.9
4.0
4.1
3.5
3.6
Prov
0.7
0.6
0.4
0.4
0.6
PBT
3.2
3.4
3.6
3.2
3.0
Net profit
2.3
2.5
2.7
2.3
2.2
Assets to Equities
7.8
8.0
7.8
7.7
8.2
BMRI ROAE
18.3
20.1
21.2
17.9
17.6
Source: Company data, Verdhana research
Fig. 5: BMRI – Loans
BMRI Loans (Bank only) IDRtn
1Q24
2Q24
3Q24
4Q24
1Q25
QoQ %
YoY %
Corporate
507.0
561.0
581.0
620.0
608.0
(1.9)
19.9
Commercial
244.0
263.0
275.0
293.0
296.0
1.0
21.3
Small scale
77.9
82.4
84.0
87.0
85.0
(2.3)
9.1
Micro
170.0
174.0
184.0
188.0
192.0
2.1
12.9
Consumers
115.0
116.0
118.0
123.0
122.0
(0.8)
6.1
Total
1,114
1,196
1,242
1,311
1,303
(0.6)
17.0
Micro as % of total loans
15.3
14.5
14.8
14.3
14.7
Consumer loan IDRbn
1Q24
2Q24
3Q24
4Q24
1Q25
QoQ %
YoY %
Mortgages
57,400
59,700
62,100
65,500
66,500
1.5
15.9
Credit cards
17,000
17,600
18,400
19,300
19,500
1.0
14.7
Autos
37,400
35,700
34,100
35,000
33,000
(5.7)
(11.8)
Other
3,270
2,880
2,970
3,010
3,020
0.3
(7.6)
Total
115,070
115,880
117,570
122,810
122,020
(0.6)
6.0
Source: Company data, Verdhana research
Fig. 6: BMRI – CoC details %
Source: Company data, Verdhana research
Fig. 7: BMRI – NPL details %
Source: Company data, Verdhana research
Fig. 8: BMRI – Loan yields
BMRI Loan yields %
4Q20
4Q21
4Q22
4Q23
1Q24
2Q24
3Q24
4Q24
1Q25
Corp
5.85
4.97
6.38
6.82
6.94
7.08
7.11
7.00
6.71
Commercial
6.30
6.43
6.50
6.83
6.83
6.89
6.91
7.08
7.09
SME
6.30
7.88
8.03
7.77
7.78
7.60
7.48
7.96
7.43
Micro
10.50
11.20
11.50
11.50
11.40
11.30
11.10
11.20
11.30
Consumer
8.18
8.84
8.47
8.15
8.06
8.06
8.02
8.57
8.17
Total
7.05
6.84
7.09
7.69
7.69
7.75
7.69
7.83
7.64
BMRI 12MMA Loan yields %
4Q20
4Q21
4Q22
4Q23
1Q24
2Q24
3Q24
4Q24
1Q25
Corp
5.85
5.44
5.45
6.92
7.02
7.03
6.99
7.03
6.98
Commercial
6.30
6.38
6.27
6.72
6.77
6.81
6.87
6.93
6.99
SME
6.30
7.52
7.94
7.98
7.91
7.78
7.66
7.71
7.62
Micro
10.50
11.35
11.50
11.63
11.55
11.45
11.33
11.25
11.23
Consumer
8.18
8.78
8.69
8.36
8.23
8.12
8.07
8.18
8.21
Total
7.05
7.05
6.96
7.82
7.83
7.81
7.71
7.74
7.73
Source: Company data, Verdhana research
INVESTMENT RATINGS A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.
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