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BBRI
Contact our analyst Achmadi Hangradhika

26% UPSIDE, BUY
5th March 2025
Price Rp 3840
Target price Rp 4850

​Stagnant Earnings Growth Due to Rising Costs and Provisions
BBRI’s 2024 earnings remained stagnant, with profit attributable to the parent entity (PATMI) growing by only 0.09% YoY to IDR 60.15 trillion. This limited growth was primarily due to a 30.58% YoY surge in interest expenses, which offset the 9.96% YoY increase in interest income. As a result, the Net Interest Margin (NIM) declined by 41 bps to 7.74%, though it remained within the bank’s guidance. However, a 195.10% YoY increase in net foreign exchange gains helped BBRI avoid negative growth. BBRI’s bank-only financial report for 1M-2025 revealed a net profit of IDR 2 trillion, reflecting a 58.35% YoY decline. This was driven by a 9.2% YoY drop in net interest income and a 340.6% surge in provision expenses, mainly due to additional management overlays as part of a long-term risk management strategy. We forecast BBRI’s PATMI to reach IDR 64.13 trillion in 2025, reflecting a 6.70% YoY growth.

Loan Growth in 2024: Corporate Strength Offsets Micro Loan Weakness
BBRI’s consolidated loan portfolio grew by 6.97% YoY to IDR 1,354.64 trillion as of December 2024, slightly below its 7%-9% target range. The shortfall was due to a 1.09% YoY decline in micro loans, despite strong corporate loan growth of 22.68% YoY. In sustainable financing, total loans reached IDR 785.26 trillion, accounting for 57.97% of total loans. The Sustainable Management of Living Natural Resources & Land Use segment was the largest contributor, with IDR 64.68 trillion in green loans. For 1M-2025, bank-only loan growth stood at 4.61% YoY. We forecast BBRI’s consolidated loan portfolio to reach IDR 1,456.05 trillion by December 2025, reflecting a 7.49% YoY increase.

CASA Growth Offsets Weak Deposit Growth
Despite weak deposit growth, BBRI’s CASA growth helped offset the decline. Total third-party funds increased by just 0.52% YoY, mainly due to a 7.80% drop in time deposits, while CASA deposits grew by 5.14%. This shift toward lower-cost funding led to a 295-bps increase in the CASA ratio to 67.30%. We forecast third-party funds to grow by 7.19% YoY by December 2025, with the CASA ratio rising to 67.49%.

Asset Quality Shows Gradual Improvement
Asset quality improved slightly in 2024, with BBRI’s gross NPL ratio standing at 2.78%. Consumer loans had the lowest NPL ratio at 1.97%, while corporate loans showed the most improvement, with NPLs declining by 126 bps YoY to 2.60%. However, micro loans deteriorated, with the NPL ratio rising from 2.47% to 2.85%. We forecast BBRI’s gross NPL ratio to improve further to 2.71% by year-end 2025.

Valuation: 26%, Upside, Buy Recommendation
Using a Dividend Discount Model (DDM) valuation, we revise our one-year target price to IDR 4,850, implying a 2.13x PBV valuation and a 26% upside potential. We maintain a Buy recommendation for BBRI.


Download full report here
Previously
BBRI Nov2024
BBRI Aug2024
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BBRI Sep2023
​BBRI Mar2023
BBRI Dec2022
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