Bank Rakyat Indonesia (BBRI IJ) (Buy) - 9M25 profit down -10% y-y

9M25 profit down -10% y-y

Although BBRI’s headline consolidated profit for 9M25 was down by 10% y-y, we see a stabilizing write-off trend on a q-q basis. This should pave the way for 2026 performance, we believe. For this reason, we see limited downside risks to earnings as well as the share price. We expect the bank to pay similar dividend of ~80-85%, which would give a yield of ~8-9%. Thus, combined with earnings improvement of ~1-2%; the implied potential return would be ~10-11% (assuming no multiple re-rating).

BBRI has released both bank-only and consolidated 9M25 results, whereby profits were both down by ~12% and ~10% y-y, respectively. This suggests that BBRI’s key subsidiaries performed better than the bank-only parent company. We attribute these soft results to 1) elevated credit costs (CoC) of 3.2% (-10bp y-y), 2) high cost of funds (CoF) of 3.6% (despite recent liquidity injection from the government), and 3) a change in the interest earnings asset mix as well as loan mix, which resulted in a slight decline in gross yields to ~10.9% (from ~11.1% a year ago).

Going into 2026, we expect CoC to be stable with a possible slight decline, as we do not expect worsening write-off or downgrade trends. Meanwhile, we expect liquidity in the banking system to improve with increased government spending as well as placement of MoF funds into the SOE banks, which should result in more stable margins. We believe these should improve earnings predictability for the bank. And for this reason, we see limited downside risks for the share prices in 2026.

Our assessment of BBRI’s bank-only results also suggests a slight decline in write-off rates. And if this persists, NPL formation, too, should improve in coming months (and 2026). We estimate BBRI’s 12MMA monthly write-off rate stood at ~3.4% as of Sep-25 (down from a peak of ~3.6% in Feb25/Jun25). If this improvement persists, we could start to see improvement in CoC in 2026.

Longer term, we retain our view that BBRI may need to start tapping into other segments, as growth in mass-market segments is structurally slower, given the fact that deposit growth in mass-market segments has been sluggish – suggesting that loan growth for this segment will be less than 5% pa. The government’s efforts to focus on mass-market segments (e.g., with village cooperative initiatives) will play a crucial role in enhancing the segment's growth potential, in our view.

9M25 consolidated results summary

3Q25 NII reached IDR37.7tn (+1% q-q; +5% y-y), bringing 9M25 NII to IDR111.0tn (+5% y-y) – implying ~73% of our FY25F estimate. Headline NIM stays at ~7.8% (-20bp y-y).

3Q25 PPOP was IDR28.4tn (flat q-q; -7% y-y), implying 9M25 POP of IDR86.7tn (-4% y-y) – representing ~73% of our FY25F projection.

3Q25 credit costs hovered at ~290bp (a drop from 1Q25’s ~360bp, 2Q25’s 315bp), bringing 9M25 CoC at ~320bp (-20bp y-y). With signs of declining write-off trends, we anticipate a possible decline in CoC in 2026F. This should improve earnings predictability.

3Q25 profit was IDR14.5tn (+15% q-q; -6% y-y), resulting in 9M25 profit of IDR40.8tn (-10% y-y). This represents ~70% of our FY25F earnings estimate.

On the balance sheet, BBRI booked loans and deposits growth of +6% y-y (+6% YTD) and +8% y-y (+8% YTD), respectively. In particular, deposit growth was driven by current accounts (+24% y-y; +16% YTD). This brings CASA ratio to ~68% (up from ~64% in 9M24). The implied LDR stood at ~97%.

On asset quality, the bank reported NPL of ~2.9% (flat q-q) and LAR of ~11.1% (flat q-q), resulting in coverage of ~192% and ~57%, respectively.

Refer to tables inside for balance sheet details.

Valuation and risks

Our TP of IDR5,000 is based on DuPont analysis, with a risk-free rate of 6.5%, an equity risk premium of 7.8%, growth of 9.3%, beta 0.85x and a CAR-adjusted ROAE of 18.0%. We also use 2025F book as reference. The implied multiples at our TP would be 2.3x 2025F book and 12.5x 2025F earnings. Risks are worsening macroeconomic trends, unfavorable regulatory changes, and tighter liquidity competition, which could increase funding costs, worsening credit quality which would raise credit costs, and higher opex. Changes in management may affect the bank’s write-off policies and thus, credit costs. This would ultimately affect the bank’s near-term earnings, in our view.

Fig. 3: BBRI quarterly results

BBRI Consolidated IDRbn	1Q24	2Q24	3Q24	4Q24	1Q25	2Q25	3Q25	YTD 2025	YTD 2024	YoY %	2025F	vs FY25F
Int inc	50,075	48,572	50,145	50,474	49,838	52,538	52,784	155,160	148,792	4.3	216,791	71.6
Int exp	14,123	14,596	14,317	14,173	13,987	15,115	15,068	44,169	43,036	2.6	63,606	69.4
NII	35,952	33,977	35,827	36,301	35,852	37,423	37,717	110,991	105,756	4.9	153,185	72.5
Total op inc	51,538	51,197	57,474	56,948	61,007	65,747	64,951	191,706	160,209	19.7	201,029	95.4
PPOP	32,043	27,851	30,609	29,836	29,894	28,379	28,400	86,672	90,503	(4.2)	118,655	73.0
Prov	12,007	9,339	11,108	9,303	12,276	10,996	10,317	33,589	32,455	3.5	45,016	74.6
PBT	20,036	18,511	19,500	20,533	17,618	17,383	18,083	53,084	58,048	(8.6)	73,639	72.1
NP	15,917	13,785	15,363	15,090	13,673	12,603	14,502	40,779	45,065	(9.5)	58,349	69.9
								YTD 2025	YTD 2024
Total assets	1,989,074	1,977,371	1,961,916	1,992,983	2,098,229	2,106,371	2,123,447	6.5	(0.2)
Gross Loans	1,308,651	1,336,780	1,353,356	1,354,641	1,373,661	1,416,619	1,438,109	6.2	6.9
- Provisions	82,557	82,051	80,055	80,898	81,579	81,170	80,747	(0.2)	(1.2)
Net loans	1,226,094	1,254,729	1,273,301	1,273,743	1,292,081	1,335,449	1,357,362	6.6	7.4
Deposits	1,416,213	1,389,662	1,362,419	1,365,450	1,421,600	1,482,120	1,474,783	8.0	0.3
- Current accounts	354,386	356,855	349,490	374,554	391,613	414,483	435,071	16.2	1.0
- Saving accounts	518,912	521,041	524,741	544,427	543,337	556,463	562,551	3.3	(0.6)
- Time deposits	542,916	511,767	488,188	446,469	486,650	511,174	477,161	6.9	0.8
Equities	298,899	311,731	329,473	323,189	305,854	322,072	337,898	4.6	4.1
LARs	166,715	161,936	159,099	147,128	155,694	157,678	159,769	8.6	0.2

Source: Company data, Verdhana research

Fig. 4: BBRI ratios

BBRI Consol - Ratios %	1Q24	2Q24	3Q24	4Q24	1Q25	2Q25	3Q25
Loans q-q	3.3	2.1	1.2	0.1	1.4	3.1	1.5
Loans y-y	10.9	11.2	8.2	7.0	5.0	6.0	6.3
Deposits q-q	4.3	(1.9)	(2.0)	0.2	4.1	4.3	(0.5)
Deposits y-y	12.8	11.6	5.6	0.5	0.4	6.7	8.2
ROAE	20.7	18.1	19.2	18.5	17.4	16.1	17.6
CAR	24.0	25.1	26.8	26.6	24.0	25.0	25.4
CIR	37.8	45.6	46.7	47.6	51.0	56.8	56.3
LDR	92.4	96.2	99.3	99.2	96.6	95.6	97.5
LLR	6.3	6.1	5.9	6.0	5.9	5.7	5.6
NPL %	2.9	2.9	2.7	2.6	2.8	2.9	2.9
NPL cov bps	214.0	211.8	216.5	226.7	211.8	199.0	192.1
Equity to asset ratio	15.0	15.8	16.8	16.2	14.6	15.3	15.9
CoC bps	373.0	282.4	330.3	274.8	360.0	315.3	289.1
LARs %	12.7	12.1	11.8	10.9	11.3	11.1	11.1
LAR cov % RHS	54.8	56.1	56.0	61.3	58.7	57.8	56.9
Restructured loans	8.0	7.6	7.3	7.0	6.7	6.4	6.5
Gross yield	11.1	10.7	11.1	11.1	10.7	10.9	10.9
Cost of funds	3.6	3.7	3.7	3.7	3.5	3.6	3.6
Spread	7.5	7.0	7.4	7.5	7.2	7.3	7.3
Risk-adj NIM	5.0	5.1	5.1	5.6	4.7	5.2	5.3
NIM	8.0	7.5	8.0	8.0	7.7	7.8	7.8
ROAA %	3.2	2.8	3.1	3.1	2.7	2.4	2.7
ROAE %	21.1	18.4	19.5	18.8	17.7	16.4	17.9

Source: Company data, Verdhana research

Fig. 5: BBRI DuPont analysis

BBRI Dupont % of assets	1Q24	2Q24	3Q24	4Q24	1Q25	2Q25	3Q25
Int inc	10.13	9.80	10.18	10.21	9.75	10.00	9.98
Int exp	2.86	2.94	2.91	2.87	2.73	2.88	2.85
NII	7.27	6.85	7.28	7.34	7.01	7.12	7.13
Net premium inc	0.11	0.18	0.11	0.25	0.21	(0.12)	0.10
NII and net premi	7.39	7.03	7.38	7.60	7.22	7.00	7.24
Total op inc	10.43	10.33	11.67	11.52	11.93	12.51	12.28
PPOP	6.48	5.62	6.22	6.04	5.85	5.40	5.37
Prov	2.43	1.88	2.26	1.88	2.40	2.09	1.95
PBT	4.05	3.73	3.96	4.15	3.44	3.31	3.42
NP	3.22	2.78	3.12	3.05	2.67	2.40	2.74
Assets to Equities	6.43	6.50	6.14	6.06	6.50	6.70	6.41
ROAE	20.69	18.06	19.17	18.50	17.39	16.06	17.58
4QMA ROAE	19.86	19.55	19.61	19.10	18.28	17.78	17.38
Opex	3.94	4.71	5.46	5.48	6.08	7.11	6.91
4QMA CoC	1.82	1.91	1.97	2.11	2.11	2.16	2.08

Source: Company data, Verdhana research

Fig. 6: Bank-only quarterly results

BBRI Bank-only IDR bn	Sep-24	Aug-25	Sep-25	m-m	y-y	YTD 2025	YTD 2024	y-y
Interest income	13,366	13,848	13,947	1%	4%	123,375	121,579	1%
Interest expenses	4,060	4,529	4,136	-9%	2%	38,876	38,638	1%
Net interest income	9,305	9,319	9,811	5%	5%	84,499	82,941	2%
Monthly PPOP	9,597	8,301	8,036	-3%	-16%	76,245	80,968	-6%
Monthly provision exp	2,792	3,457	2,859	-17%	2%	30,358	28,392	7%
Monthly net profit	5,466	4,021	4,034	0%	-26%	36,643	41,673	-12%

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.

GENERAL DISCLOSURE/DISCLAIMER
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Rating Table

Rating Remains	Buy
Target price Remains	IDR 5,000
Closing price 29 October 2025	IDR 3,890

Research Analysts

Erwin Wijaya (erwin.wijaya@verdhana.id)

Tags: BANKS, Bank Rakyat Indonesia, BBRI, BBRI JK, BBRI IJ, Erwin Wijaya

Bank Rakyat Indonesia (BBRI IJ) (Buy) - 9M25 profit down -10% y-y

9M25 profit down -10% y-y

Fig. 1: BBRI 9M25 y-y summary %

Fig. 2: BBRI : Bank-only vs consolidated comp

Fig. 3: BBRI quarterly results

Fig. 4: BBRI ratios

Fig. 5: BBRI DuPont analysis

Fig. 6: Bank-only quarterly results

Fig. 7: BBRI - LLR vs 12MMA WO %

Fig. 8: Still elevated WO rates BBRI - 12MMA CoC vs 12MMA WO %

Rating Table

Research Analysts

yudi Administrator

Bank Central Asia BBCA IJ - Buy - Solid YTD Jul-24 results

Bank Rakyat Indonesia -BBRI IJ- Buy - Towards more commercial micro

Bank Negara Indonesia BBNI IJ - Buy - Operating 1H24 results were below

Bank Rakyat Indonesia -BBRI IJ- Buy - YTD Jul-24 bank only results - steady progress

Bank Rakyat Indonesia -BBRI IJ- Buy - ROAE uptrend on positive micro trends

Bank Central Asia -BBCA IJ- Buy - Steady growth reiterate Buy new TP IDR13200

Bank Rakyat Indonesia (BBRI IJ) (Buy) - 9M25 profit down -10% y-y

Fig. 1: BBRI 9M25 y-y summary %

Fig. 2: BBRI : Bank-only vs consolidated comp

Fig. 3: BBRI quarterly results

Fig. 4: BBRI ratios

Fig. 5: BBRI DuPont analysis

Fig. 6: Bank-only quarterly results

Fig. 7: BBRI - LLR vs 12MMA WO %

Fig. 8: Still elevated WO rates BBRI - 12MMA CoC vs 12MMA WO %

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