Indonesia Banks - YTD Oct-25 results summary; looking for earnings rebound in 2026

YTD Oct-25 results summary; looking for earnings rebound in 2026

Indonesia’s major banks (BBCA IJ, BRIS IJ, BMRI IJ, BBNI IJ and BBRI IJ – all rated Buy) have published their bank-only YTD Oct-25 results. Overall, they delivered soft yet expected results, with the exceptions for BBCA and BRIS, which reported solid results. Combined YTD Oct-25 profits from these five banks were down 5% y-y, while BRIS and BBCA recorded profit jumps of +9% and +4% y-y, respectively. For the major banks under our coverage, asset yields dipped slightly to 7.1% in Oct-25 (compared to 8.0% in Dec-24 and 7.7% in Oct-24), bringing YTD Oct-25 asset yield to 7.3% (-30bp y-y). Funding costs have stabilized due to improved liquidity conditions, as evidenced by M2 growth of 8.0% as of Sep-25 (up from a low of 4.9% in May-25). The average cost of funds (CoF) of the major banks has been hovering at ~2.5-2.6% (p.a.) for the past 12 months. With stable funding costs, we expect more stable net interest margins (NIMs) for the banks under our coverage in 2026, which would lead to core earnings visibility (i.e., PPOP). As of Oct-25, the average monthly NIM of the major banks continued to show a stable trajectory of 5.0% (-10bp m-m; -40bp y-y). We think some of these banks (particularly for BBNI and BMRI) have experienced larger NIM declines in 2025 than their major peers. However, we believe that these should be near the bottom, paving the way for improved earnings going into 2026. Overall, we think these banks should report improved earnings for FY26F, thereby reducing downside risks (that may arise from loan downgrades). More importantly, these should translate into positive total shareholder return (TSR) for these banks, which we estimate to hover around 10-11%.

Another area worth close monitoring would be asset quality. So far, write-off trends across banks have been stable. However, we think risks of higher credit costs may push credit costs higher across banks, particularly when excess provisions during pandemic periods have been depleted. Still, the government’s efforts to stimulate the economy might mitigate credit risks in 2026, we think. This means, in our view, that credit cost increases to be manageable.

As highlighted in our previous reports, some of these major banks had revised down their loan growth guidance to reflect soft loan growth YTD Oct-25. Nonetheless, these are largely already expected by the market.

Among the major banks, we believe BBRI will continue to face the issue of maturing micro/ultra-micro loans. BBRI’s profit drop reflects persistently high estimated write-off rates and likely ongoing NPL formations. We estimate BBRI’s 12MMA monthly write-off rate stood at ~3.4% in Oct-25. So far, it has shown stabilizing trends (not worsening), which would mean improved credit costs (CoC) for BBRI in the upcoming quarters. Nevertheless, we think the two areas that witnessed high write-off rates and/or NPL formations rates were micro and small loan portfolios. Given the above, we think BBRI’s medium-term earnings growth trajectory will remain subdued compared to other major banks. Our projected three-year (2024-27F) consolidated earnings CAGR is ~0.4%.

Based on the results of the major banks, BBCA (BBCA IJ, Buy) and BRIS (BRIS IJ, Buy) continue to be our preferred banking stocks, followed by BMRI (BMRI IJ, Buy) / BBNI (BBNI IJ, Buy) / BBRI (BBRI IJ, Buy).

We expect Indonesia’s major banks to deliver a firmer 4Q25, driven by stronger loan disbursements following the government’s liquidity injection, easing funding costs, and typical year-end activity. While loan growth has been soft as depicted with negative working capital loans in 2025F, we think this should improve in 2026F from a low 2025F base. Among these major banks, we think BMRI and BRIS could show the most visible sequential earnings improvements, BBCA likely posts steady but capped growth amid higher opex and selective provisioning, BBRI remains dependent on micro collections, and BBNI’s recovery hinges on trade-linked activity. Into 1Q26, momentum should broadly carry through, in our view, as funding normalizes and credit demand stabilizes, though upgrades will still depend on CASA rebuild and disciplined provisioning. Overall, 4Q25F marks the first meaningful turn in the sector’s growth–profitability trajectory, with 1Q26F reinforcing the trend.

Summary of Oct-25 results

Below is a summary of our covered major banks’ Oct-25 results. Liquidity in the banking system has improved, and we anticipate it to improve further for the remainder of 2025 and potentially 2026. Hence, we have also seen a more stable funding cost trend and NIMs.

YTD Oct-25 net interest income from major banks 2% y-y
- BRIS +13% y-y
- BBCA +4% y-y
- BMRI +4% y-y
- BBRI +2% y-y
- BBNI -1% y-y
YTD Oct-25 PPOP from major banks -3% y-y
- BRIS +9% y-y
- BBCA +8% y-y
- BBNI -2% y-y
- BBRI -6% y-y
- BMRI -11% y-y
YTD Oct-25 CoC for major banks at 1.4% (+20bp y-y)
- BBRI CoC of 3.0% (-10bp y-y) as BBRI continues writing off NPLs in small and/or micro segments
- BBNI CoC of 2.3% (+110bp y-y)
- BRIS CoC of 0.7% (-10bp y-y)
- BBCA CoC of 0.4% (+90bp y-y)
- BMRI CoC of 0.2% (-70bp y-y)
YTD Oct-25 implied risk-adj NIM for major banks at 3.9%
- BBCA 5.4% (-90bp y-y) as NIM @ 5.7% (-30bp y-y)
- BRIS 4.3% (-40bp y-y) as NIM @ 4.8% (-50bp y-y)
- BMRI 4.2% (+20bp y-y) as NIM @ 4.3% (-40bp y-y)
- BBRI 3.8% (-30 y-y) as NIM @ 5.9% (-40bp y-y)
- BBNI 2.2% (-130bp y-y) as NIM @ 3.7% (-70bp y-y)
YTD Oct-25 profits for major banks -5% y-y
- BRIS +9% y-y
- BBCA +4% y-y
- BBNI -6% y-y
- BMRI -10% y-y
- BBRI -10% y-y

On the balance sheet, loan growth of the major banks, combined, was up 8% y-y (+5% YTD); BRIS, +13% y-y (+10 YTD); BMRI, +11% y-y (+7% YTD); BBNI, +10% y-y (+4% YTD); BBCA, +8% y-y (+3% YTD); BBRI, +5% y-y (+6% YTD). In terms of LLR, BBRI stood at 5.6% (down from 6.2% in Oct-24), followed by BBNI at ~4.2% (5.6%), BRIS at ~3.6% (3.9%), BBCA at ~3.4% (3.9%) and BMRI at ~2.7% (3.2%).

In terms of deposits, overall deposits were up 12% y-y (+11% YTD); for BBNI +21% y-y (+15); BRIS +21% y-y (+10%); BMRI +15% y-y (+15%); BBRI +8% y-y (+8%); and BBCA +8% y-y (+6%). Time Deposits recorded strong growth of 16% y-y (+22% YTD) due to the government placements in SOE banks, with BMRI posting the highest growth among major banks, at +51% y-y / BBNI +40% / BRIS +31% / BBRI -8% / BBCA -5%. Headline LDR for these banks reached at 87.3% in Oct-25 (from 90.5% in Oct-24).

Valuations and risks

BBCA – We derive our TP of IDR12,300 using DuPont analysis, with key parameters as follows: a risk-free rate of 6.5%, an equity risk premium of 7.8%, beta of 0.8x and a CARadjusted ROAE of 24.5%. Our TP implies 5.4x FY25F P/B (vs 3.9x currently) and 26.7x FY25F P/E (vs 19.3x currently). Risks are worsening economic trends, tighter liquidity competition, and/or higher credit cost and opex growth.

BMRI – We derive our TP of IDR6,000 using DuPont analysis, with key parameters as follows: a risk-free rate of 6.5%, an equity risk premium of 7.8%, beta of 1.09x and a CARadjusted ROAE of 18.5%. Our TP implies 1.9x FY25F P/B (vs 1.6x currently) and 10.4x FY25F P/E (vs 7.8x currently). Risks are worsening economic trends, tighter liquidity competition, and/or higher credit cost and opex growth.

BBRI – We derive our TP of IDR5,000 using DuPont analysis, with key parameters as follows: a risk-free rate of 6.5%, an equity risk premium of 7.8%, beta of 0.85x and a CAR-adjusted ROAE of 18.0%. Our TP implies 2.3x 2025F P/B (vs 1.9x currently) and 12.5x 2025F P/E (vs 11.3x currently). 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.

BBNI – We derive our TP of IDR5,500 using DuPont analysis, with key parameters as follows: a risk-free rate of 6.5%, an equity risk premium of 7.8%, beta of 1.04x and a CAR-adjusted ROAE of 16.0%. Our TP implies 1.2x FY25F P/B (vs 1.0x currently) and 9.7x FY25F P/E (vs 7.7x currently). Key risks are worsening macroeconomic trends, tighter liquidity competition, and/or higher credit costs and opex growth.

BRIS – We derive our TP of IDR3,250 using DuPont analysis, with key parameters including: a risk-free rate of 6.5%, an equity risk premium of 7.8%, beta of 1.2x and a CAR-adjusted ROAE of 18.0%. Our TP implies 2.9x FY25F P/B (vs 2.4x currently) and 19.4x FY25F P/E (vs 16.2x currently). Risks are worsening economic trends, tighter liquidity competition, and/or higher credit cost and opex growth.

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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ANALYST CERTIFICATION
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Research Analysts

Erwin Wijaya (erwin.wijaya@verdhana.id)

Tags: BANKS, Erwin Wijaya

Indonesia Banks - YTD Oct-25 results summary; looking for earnings rebound in 2026

YTD Oct-25 results summary; looking for earnings rebound in 2026

Fig. 1: EPS 2024-26F

Fig. 2: TSR 2026F

Fig. 3: M2 vs loan growths

Fig. 4: Major banks combined monthly results

Fig. 5: Major banks comparisons

Fig. 6: BBCA results summary

Fig. 7: BMRI results summary

Fig. 8: BBRI results summary

Fig. 9: BBNI results summary

Fig. 10: BRIS results summary

Fig. 11: Major banks’ P&L comparisons

Fig. 12: Major banks’ balance sheet comparisons

Fig. 13: Major banks’ ratios comparisons

Fig. 14: Major banks’ NIM comparisons

Fig. 15: NIM vs LDR trends

Fig. 16: BBCA 12MMA CoC vs 12MMA WO %

Fig. 17: BMRI 12MMA CoC vs 12MMA WO %

Fig. 18: BBRI 12MMA CoC vs 12MMA WO %

Fig. 19: BBNI 12MMA CoC vs 12MMA WO %

Fig. 20: BRIS 12MMA CoC vs 12MMA WO %

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

Indonesia Banks - YTD Oct-25 results summary; looking for earnings rebound in 2026

Fig. 1: EPS 2024-26F

Fig. 2: TSR 2026F

Fig. 3: M2 vs loan growths

Fig. 4: Major banks combined monthly results

Fig. 5: Major banks comparisons

Fig. 6: BBCA results summary

Fig. 7: BMRI results summary

Fig. 8: BBRI results summary

Fig. 9: BBNI results summary

Fig. 10: BRIS results summary

Fig. 11: Major banks’ P&L comparisons

Fig. 12: Major banks’ balance sheet comparisons

Fig. 13: Major banks’ ratios comparisons

Fig. 14: Major banks’ NIM comparisons

Fig. 15: NIM vs LDR trends

Fig. 16: BBCA 12MMA CoC vs 12MMA WO %

Fig. 17: BMRI 12MMA CoC vs 12MMA WO %

Fig. 18: BBRI 12MMA CoC vs 12MMA WO %

Fig. 19: BBNI 12MMA CoC vs 12MMA WO %

Fig. 20: BRIS 12MMA CoC vs 12MMA WO %

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