BBRI - Weak 1Q25 PATMI on higher provisions and soft top line

KBVS Update
Friday, 9 May 2025

BBRI - Weak 1Q25 PATMI on Higher Provisions and Mild Top Line
(Maintain BUY; TP: IDR4,470)

* BBRI posted poor earnings result in 1Q25 (-13.9%) arrive below consensus expectation and our ‘25F of BBRI PATMI with a run-rate of 21.0%/21.6% vs 25.2%.

* Loan growth of 5% yoy came in below ‘25F management guidance (7-9% yoy) and our ‘25F loan growth for BBRI (7.1% yoy). We expect the improving deposit mixed will continue (TD -10.4% and CASA +7.1% yoy).

* As expected, pressure on NIM continue recorded at 7.7% vs 8.0% in 1Q24. Yet it expanded on quarterly basis by 0.2% qoq and still within BBRI guidance of 7.3%-7.7%. We like the risk metrics achievement with NPL stood at 2.9% aligned with BBRI’s ‘25F NPL of below 3%. CoC at 3.53% was around 30bps yoy better, despite still above ‘25F of 3.0%-3/2%.

* We revisit our model to accommodate below than-expected result and the previous BBRI stock sell-off. We made adjustment on several assumptions: (1) loan yield (2) funding cost (3) Rf and EMR (4) RR and (5) normalized RoE. Maintain BUY with GGM-based TP of 4,470, pegged at 2.1x '25F P/B, while currently trading at 1.8x ‘25F P/B, or slightly above its -1SD of 1.7x.

Regards,
Akhmad Nurcahyadi - KBVS Research team