BMRI - 1Q25 earnings 3.9% yoy; inline

KBVS Update
Friday, 2 May 2025

BMRI - 1Q25 earnings 3.9% yoy; inline
(Maintain BUY; TP: IDR6,240)

* Amid solid top line (11.5% yoy), yet pressured by high deposit cost (24.4% yoy) and higher opex (15.7% yoy), BMRI’s 1Q25 earnings (3.9% yoy) came in inline at a run rate of 23.5%/21.6% (vs 23.3%) of our ‘25F PATMI for BMRI and street forecast.

* BMRI robust loan growth of 16.5% yoy, far above our forecast (10.4% yoy), banking industry (9.16% yoy) and ‘25F BMRI’s guidance (10%-12% yoy). Total TPF increased 11.2% yoy. Yet, the growth was mainly driven by high funding cost (18.9% yoy, 12.0% qoq). Worth to note CASA growth (8.62% yoy) is well managed, driven by strong low funding cost of SA growth of 12.0% yoy.

* NIM (-27bps to 4.8%), yet likely to arrive at ‘25F guidance (5.0%-5.2%) supported by more solid deposit mix and steady yield. Gross NPL was well managed at 1.17% vs 1.17% in 1Q24 and 1.12% in 4Q24. CoC stood at 0.88% and around 33bps higher vs 0.55% in 4Q24. Nonetheless, it improves by 17bps on yearly basis from 1.05% in 1Q24 and surpassing ‘25F guidance of 1.0%-1.2%.

* ‘25F management guidance sound achievable. Softer deposit cost growth will be a key driver, while steady robust non-interest income and a controllable cost-to-income ratio coupled with manageable asset quality will overall support ‘25F earnings growth.

* We fine-tuned several assumptions (retention ratio, RF, and MRP) to accommodate the previous sell-off on banking stocks and the prolonged uncertainty. Maintain BUY with GGM-based TP of IDR6,240 (5.7% below consensus TP), pegged at 1.9x ‘25F P/B, while currently trading at 1.5x ‘25F P/B or slightly above its -1SD historical mean of 1.4x.

Regards,
Akhmad Nurcahyadi - KBVS Research team