BRIS has released its YTD Apr-25, results with headline profit of IDR2.4tn (+6% y-y) – making it one of the top five banks in terms of profit growth in Indonesia. At the operating level, YTD Apr-25 PPOP rose to IDR4.0tn (a punchy +12% y-y). Lower profit growth than PPOP can be attributed to a significant increase in credit costs to 1.3% of loans in Apr-25, bringing YTD Apr-25 CoC to 1.0%. In our view, this is a reflection of strong loan growth rather than rising write-off rates. Based on our assessments, the estimated 12MMA write-off rate stood at 0.6% of total loans – compared to 12MMA CoC of 0.8%. This resulted in a stable Loan-Loss-Reserves (LLR) of 3.7% (flat on a YTD basis). Refer to charts inside for details.

Liquidity remains tight, with YTD Apr-25 funding costs at 2.8% (a slight uptick from 2.6% a year ago). However, in recent months it has been largely stable. This led to YTD Apr25 net financing margin (equivalent to NIM for conventional banks) of 4.8% (-20bp y-y). We expect 2Q25 to be similar; however, going into 2H25, we see room for potentially better funding costs, as we expect the government to ramp up its spending, as well as more SRBI net maturities in 2Q25 and 3Q25 (which could help with liquidity).

On the balance sheet, the bank reported financing and deposit growth of 14% y-y (+3% YTD) and 10% y-y (-1% YTD), respectively, resulting in a loan-to-financing ratio (LFR) of 88% (+310bp y-y / +360bp YTD). We think financing growth will settle around 10% at the end of the year.

Post results, we maintain BRIS as one of our long-term preferred banking stocks in Indonesia. Its strong market positioning in shariah banking space remains unparalleled, in our view, with a market share we estimate standing at >50%.

Valuations and risks

Our TP of IDR3,800, using DuPont methodology assumes the following: a risk-free rate of 6.5%, an equity risk premium of 7.8%, beta of 1.2x and a CAR-adjusted ROAE of 18.1%. We have also used 2025F book value in deriving our TP. Our TP implies a FY25F P/B of 3.4x and a FY25F P/E of 21.5x. Risks are worsening macroeconomic trends, unfavorable regulatory changes, tighter liquidity competition that could increase funding costs, worsening credit quality that could raise credit costs, material management changes, and/or persistently high opex.

Fig. 1: BRIS – YTD Y-Y performance %

Fig. 4: BRIS – 12MMA CoF

Fig. 5: BRIS – 12MMA CoC vs 12MMA WO %

Fig. 6: BRIS – 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)