BMRI has released its bank-only Aug-25 results, which came in below our projections (and Bloomberg consensus estimates). On an YTD Aug-25 basis, the bank reported a profit of IDR30.7tn (-9% y-y). We believe that liquidity for the remainder of 2025F will gradually improve (and thus funding cost should not worsen more, and possibly even improve), as we expect higher government spending to rejuvenate economic growth. In addition, combined with increased placement of government monies (i.e., from the MoF) as well as Danantara’s (unlisted) placement of its dividend receipts into SOE banks (as witnessed in the growth rate of the bank’s deposits), these should translate into higher M2 growth (+6.5% in Jul25) and ease liquidity concerns in the banking system, in our view. Given the above, we see limited catalysts for the stock in the near term. On a long-term basis, we think BMRI will maintain its dominant position in the Indonesia banking sector.

Bank-only Aug-25 results summary

For Aug-25, net interest income stood at IDR7.2tn (+33% m-m; +14% y-y), with gross interest income of IDR10.8tn (+10% m-m; +12% y-y), and gross interest expenses of IDR3.5tn (-19 m-m; +9% y-y). This brings YTD Aug-25 NII to IDR51.2tn (+3% y-y). Meanwhile, PPOP slipped to IDR3.4tn (-55% m-m; -44% y-y), bringing YTD Aug-25 PPOP to IDR42.0tn (-11% y-y). YTD Aug-25 CoC stood at IDR4.5tn (-26% y-y) – implying YTD CoC of 50bp (-30bp y-y). As a result, BMRI’s implied YTD NIM and risk-adjusted NIM stood at 4.3% (-30bp y-y) and 3.9% (-20bp y-y), respectively. Bank-only Aug-25 net profit reached IDR3.1tn (-34% m-m; -28% y-y), bringing YTD Aug-25 profit to IDR30.7tn (-9% y-y). Overall, the implied balance sheet ROAA stood at 1.9%, with balance sheet ROAE of 15%.

On the balance sheet, BMRI booked loan growth of 11% y-y (+3% YTD) while deposits grew 10% y-y (+8% YTD), with growth coming mostly from Time Deposits (TD) up 19% y-y / up 30% YTD. Current Account (CA) and Savings Account (SA) also grew a respective 9% y-y (+7% YTD) and 6% y-y (-2% YTD), resulting in a CASA ratio of 76.4% and LDR of 94.2% (vs 93.7% in Aug-24). Loan-Loss-Reserve (LLR) stood at 2.9% (-30bp y-y / flat YTD).

Valuation and risks

We derive our TP of IDR6,500 using DuPont analysis with key parameters as follow: a risk-free rate of 6.5%, an equity risk premium of 7.8%, growth of 11.0%, beta 1.08x and a CAR-adjusted ROAE of 19.0%. Our TP implies 2.1x FY25F P/B (vs 1.5x currently) and 11.3x FY25F P/E (vs 8.1x currently). Risks are worsening economic trends, tighter liquidity competition, and/or higher credit cost and opex growth.

Fig. 1: BMRI YTD Y-Y Performance %

Fig. 3: BMRI - 12MMA CoC vs 12MMA WO %

Fig. 4: BMRI LLR vs 12MMA WO %

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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Erwin Wijaya (erwin.wijaya@verdhana.id)