Indonesia Banks - YTD Sep-25 results summary

YTD Sep-25 results summary

Indonesia’s major banks (BBCA IJ, BRIS IJ, BMRI IJ, BBNI IJ and BBRI IJ – all rated Buy) have published their consolidated YTD Sep-25 results. Overall, they delivered soft yet expected results, except for BBCA and BRIS which reported solid results. For our covered major banks, asset yields dipped slightly to 7.2% in Sep-25 (compared to 8.0% in Dec-24 and 7.5% in Sep-24), bringing YTD Sep-25 asset yield to 7.4% (-20bp y-y). Funding costs have stabilized due to improved liquidity condition, as evidenced by M2 growth of 7.6% as of Aug-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 our covered banks in 2026, which would lead to core earnings visibility (i.e., PPOP). As of Sep-25, the average monthly NIM of the major banks continued to show a stable trajectory of 5.1% (+10bp m-m; -20bp y-y). This, we believe, should result in some FY26F earnings improvement for our covered banks, thereby reducing downside risks (that may arise from loan downgrades).

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.

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

Amongst 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 Sep-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).

Summary of Sep-25 results

Below is a summary of our covered major banks’ Sep-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 Sep-25 net interest income from major banks +3% y-y
- BRIS +14% y-y
- BBCA +5% y-y
- BMRI +3% y-y
- BBRI +2% y-y
- BBNI -1% y-y
YTD Sep-25 PPOP from major banks -3% y-y
- BBCA +9% y-y
- BRIS +9% y-y
- BBNI -4% y-y
- BBRI -6% y-y
- BMRI -12% y-y
YTD Sep-25 CoC for major banks at 1.0% (-10bp y-y)
- BBRI CoC of 2.7% (-10bp y-y) as BBRI continues writing off NPLs in small and/or micro segments
- BBNI CoC of 0.9% (+10bp y-y)
- BRIS CoC of 0.8% (-20bp y-y)
- BMRI CoC of 0.4% (+60bp y-y)
- BBCA CoC of 0.2% (-60bp y-y)
YTD Sep-25 implied risk-adj NIM for major banks at 4.2%
- BBCA 5.5% (+20bp y-y) as NIM @ 5.6% (-20bp y-y)
- BRIS 5.2% (+30bp y-y) as NIM @ 5.8% (+10bp y-y)
- BBRI 4.6% (flat y-y) as NIM @ 6.4% (-10bp y-y)
- BMRI 3.9% (-70bp y-y) as NIM @ 4.2% (-30bp y-y)
- BBNI 2.8% (-60bp y-y) as NIM @ 3.5% (-50bp y-y)
YTD Sep-25 profits for major banks -5% y-y
- BRIS +9% y-y
- BBCA +8% y-y
- BBNI -6% y-y
- BMRI -11% y-y
- BBRI -12% y-y

On the balance sheet, loan growth of the major banks, combined, was up +8% y-y (+4% YTD); BRIS, +13% y-y (+8 YTD); BMRI, +11% y-y (+5% YTD); BBNI, +10% y-y (+5% YTD); BBCA, +7% y-y (+2% YTD); BBRI, +5% y-y (+5% YTD). In terms of LLR, BBRI remained at ~5.6% (down from 6.2% in Sep-24), followed by BBNI at ~4.4% (5.6%), BRIS at ~3.6% (3.9%), BBCA at ~3.4% (4.0%) and BMRI at ~2.8% (3.1%).

In terms of deposits, overall deposits were up +9% y-y (+8% YTD); for BBNI +21% y-y (+16); BRIS +16% y-y (+6%); BMRI +12% y-y (+12%); BBCA +7% y-y (+6%); and BBRI +1% y-y (+1%). Time Deposits recorded strong growth of +15% y-y (+21% YTD) due to the government placements in SOE banks, with BMRI and BBNI posting the highest growth among major banks, at +40% y-y / BRIS +23% / BBRI -2% / BBCA -3%. Headline LDR for these banks reached at 93.2% in Sep-25 (from 89.5% in Sep-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 CAR-adjusted 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 CAR-adjusted 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
The research analyst primarily responsible for the content of this report and certifies that the views about the companies including their securities expressed in this report accurately reflect his/her personal views. The analyst also certifies that no part of his/her compensation was, is, or will be, directly, or indirectly, related to specific recommendations or views expressed in this report.

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Research Analysts

Erwin Wijaya (erwin.wijaya@verdhana.id)

Tags: BANKS, Indonesia Banks, Erwin Wijaya

Indonesia Banks - YTD Sep-25 results summary

YTD Sep-25 results summary

Fig. 1: EPS 2024-26F

Fig. 2: TSR 2026F

Fig. 3: M2 vs loan growths y-y

Fig. 4: Combined major banks quarterly results

Fig. 5: Major banks’ loan and deposit growths

Fig. 6: Major banks’ P&L

Fig. 7: BBCA summary

Fig. 8: BMRI summary

Fig. 9: BBRI summary

Fig. 10: BBNI summary

Fig. 11: BRIS summary

Fig. 12: Major banks’ P&L

Fig. 13: Major banks’ B/S

Fig. 14: Major banks’ ratios

Fig. 15: Bank-only NIM

Fig. 16: NIM vs LDR trends

Fig. 17: BBCA 12MMA CoC vs WO

Fig. 18: BMRI 12MMA CoC vs WO

Fig. 19: BBRI 12MMA CoC vs WO

Fig. 20: BBNI 12MMA CoC vs WO

Fig. 21: BRIS 12MMA CoC vs 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 Sep-25 results summary

Fig. 1: EPS 2024-26F

Fig. 2: TSR 2026F

Fig. 3: M2 vs loan growths y-y

Fig. 4: Combined major banks quarterly results

Fig. 5: Major banks’ loan and deposit growths

Fig. 6: Major banks’ P&L

Fig. 7: BBCA summary

Fig. 8: BMRI summary

Fig. 9: BBRI summary

Fig. 10: BBNI summary

Fig. 11: BRIS summary

Fig. 12: Major banks’ P&L

Fig. 13: Major banks’ B/S

Fig. 14: Major banks’ ratios

Fig. 15: Bank-only NIM

Fig. 16: NIM vs LDR trends

Fig. 17: BBCA 12MMA CoC vs WO

Fig. 18: BMRI 12MMA CoC vs WO

Fig. 19: BBRI 12MMA CoC vs WO

Fig. 20: BBNI 12MMA CoC vs WO

Fig. 21: BRIS 12MMA CoC vs WO

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