BBNI released its 1H25 results on 25 July; the results,were slightly behind our FY25F projections. The bank booked 2Q25 profit of IDR4.7tn (-12% q-q and y-y), bringing 1H25 headline profit to IDR10.1tn (-6% y-y) and accounting for ~47% of our FY25F estimates (post downward earnings forecast adjustments). This reaffirms our view on the challenging macroeconomic environment (slow money supply, tight liquidity and high credit risks). However, we believe that liquidity in 2H25F will improve (and thus funding cost should also improve or not worsen), as we expect higher government spending in 2H25F in order to rejuvenate economic growth. Hence, BBNI’s soft 1H25 results come as no surprise to us.

During the earnings call, management revised down its NIM guidance from 4.0-4.2% previously to ~3.8% for FY25, while loan growth and credit cost assumptions remained unchanged.Management also commented on the bank’s readiness to support the Village Cooperatives (Koperasi Merah Putih) scheme, as long as it aligns within the bank’s policy and values.

2Q25 results summary
● Net interest income (NII) reached IDR9.7tn (-5% q-q; -4% y-y), bringing 1H25 NII to IDR 19.9tn (flat y-y) and accounting for ~45% of our FY25F projection.
● PPOP reached IDR7.9tn (-3% q-q and y-y), bringing 1H25 PPOP to IDR16.1tn (-1% y-y) and accounting for ~44% of our FY25F projection.
● The bank booked credit costs of IDR2.1tn, implying CoC of 110bp (+30bp q-q; +20bp y-y). As a result, NIM and risk-adjusted NIM stood at 3.6% (-30bp q-q / -50bp y-y) and 2.8% (-50bp q-q; -60bp y-y), respectively. Given our view that liquidity in 2H25F will improve, we expect NIM and CoF to also improve or not worsen.
● On the bottom line, profit reached IDR4.7tn (-12% q-q and y-y), bringing 1H25 NP to IDR10.1tn (-6% y-y) and accounting for ~47% of our FY25F projection.
● On the balance sheet, BBNI booked loan growth and deposit growth of 7% and 17% y-y, respectively. Loan growth was predominantly from corporates (+10% y-y) and consumers (+11% y-y), while deposit growth mostly came from current accounts (+25% y-y) and savings accounts (+11% y-y). Given these, the bank reported an elevated CASA ratio of 72.0% (+150bp q-q; +130bp y-y), and a loans-to-deposits ratio (LDR) of 86.5% (-690bp q-q; -760bp y-y).

Valuation and risks

We derive our TP of IDR6,100 using DuPont analysis, with key parameters as follows: a risk-free rate of 6.5%, an equity risk premium of 7.8%, long-term growth of 8.5%, a beta of 1.0x and a CAR-adjusted ROAE of 16.5%. Our TP implies 1.3x FY25F P/B (vs current price valuation of 1.0x) and 10.7x FY25F P/E (vs current price valuation of 7.5x). Risks are worsening economic trends, tighter liquidity competition, and/or higher credit cost and opex growth.

Fig. 1: BBNI 2Q25 summary %

Fig. 5: BBNI 12MMA CoC vs 12MMA WO %

Fig. 6: BBNI 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)