BMRI - Dividend guidelines after earning a profit of IDR55.78 tn in FY24

BMRI - Dividend guidelines after earning a profit of IDR55.78 tn in FY24 Bank Mandiri (BMRI) signals a commitment to shareholder returns following a strong 2024 performance, achieving a net profit of IDR55.78 tn. Maintaining a consistent dividend payout ratio of 60% over the past five years, aligned with the directives of the Ministry of State-Owned Enterprises, the bank intends to continue this practice. Director of Finance and Strategy, Sigit Prastowo, emphasized that the dividend policy balances shareholder returns with the need to maintain a strong capital base, optimize profitability, and sustain long-term business growth. In 2023, Bank Mandiri distributed cash dividends amounting to IDR33.03 tn, representing 60% of its net profit. While the final decision on the dividend payout ratio for 2024 rests with the Ministry of State-Owned Enterprises, as the primary shareholder, Bank Mandiri remains committed to enhancing shareholder value while ensuring the long-term sustainability of its operations. (Source : Bisnis Indonesia) Comment : A consistent and attractive dividend yield can make Bank Mandiri an attractive investment option for income-seeking investors. The decision to maintain a 60% payout ratio while prioritizing capital strength and long-term growth indicates a strong financial position and confidence in future prospects. In the face of prevailing market volatility and subdued stock valuations, we anticipate that BMRI's compelling dividend payout ratio will serve as a significant investor draw. Driving 2025 earnings growth will be a combination of moderating funding costs and sustained improvement in asset quality. Conversely, the prevailing high SRBI yields and the persistent tight liquidity conditions pose notable challenges. Maintain BUY with GGM-based TP IDR8,180 (2.3x '25F P/B).