BBTN
Contact our analyst Avanza
13.36% Upside. BUY
12th August 2026
Price Rp1,210
Target price Rp1,400
Net Profit Improves Despite Pressure on Net Interest Income
BBTN recorded net profit of IDR2.40 trillion in 1H26, increasing 40.78% YoY from IDR1.71 trillion in the same period last year. Earnings growth was primarily supported by a significant 61.32% YoY decline in provision expenses. However, net interest and sharia income declined 8.00% YoY, in line with an 11.72% YoY decrease in interest and sharia income. NIM stood at 3.65%, improving 27 bps YoY but declining 43 bps QoQ. Looking ahead, we expect BBTN’s net profit to grow 7.95% YoY in FY2026, supported by lower provision expenses. However, net interest and sharia income is expected to remain under pressure amid tight liquidity conditions, which could keep the company’s cost of funds elevated.
Loan Growth Supported by Inorganic Expansion
As of 2Q26, BBTN’s total gross loans reached IDR418.11 trillion, increasing 11.17% YoY from IDR376.11 trillion in the same period last year. The housing loan segment remained the largest contributor, with outstanding loans of IDR332.89 trillion, up 4.76% YoY from IDR317.77 trillion. Within this segment, mortgage loans continued to serve as the key growth driver, increasing 8.12% YoY to IDR196.97 trillion. Meanwhile, the non-housing loan segment recorded significantly stronger growth, rising 46.08% YoY to IDR85.23 trillion from IDR58.34 trillion. Loan growth was supported by BBTN’s inorganic expansion strategy, including the first phase of its acquisition of a pension loan portfolio managed by PT Bank SMBC Indonesia Tbk, valued at IDR12.6 trillion. Looking ahead, we expect BBTN’s loan portfolio to grow 9.82% YoY by end-2026, supported by continued organic expansion and the planned second phase of the pension loan portfolio acquisition in August, with an estimated value of around IDR7.3 trillion.
Asset Quality Continues to Improve
BBTN’s asset quality improved further in 2Q26, with the gross NPL ratio declining 36 bps YoY to 2.97%. The improvement reduced the need for credit loss provisioning, with cost of credit declining 29 bps YoY to 1.01%. Despite lower provisioning expenses, the NPL coverage ratio remained healthy at 122.49%, providing an adequate buffer against potential deterioration in credit quality. Looking ahead, we expect BBTN’s gross NPL ratio to improve slightly further to around 2.94% by end-2026, supporting a more favorable credit-cost environment and earnings outlook.
Customer Deposits Growth Moderates
On the funding side, BBTN’s customer deposits increased 6.56% YoY to IDR432.95 trillion in 2Q26, from IDR406.30 trillion in the same period last year. However, growth moderated from 9.92% YoY in 1Q26, reflecting tighter banking system liquidity and increased competition for funding. Looking ahead, we expect BBTN’s customer deposits to grow 8.75% YoY by end-2026. Maintaining deposit growth will remain important in supporting loan expansion while managing funding costs and protecting margins.
Valuation: Maintain BUY, TP IDR1,400 (+13.96% Upside)
We maintain our BUY recommendation on BBTN with a revised 12-month target price of IDR1,400, implying 13.36% upside. Our valuation is based on a multi-stage Dividend Discount Model (DDM) incorporating 2Q26 performance and forward-looking macroeconomic assumptions, resulting in an implied PBV of 0.49x. We believe BBTN’s improving asset quality, lower provisioning requirements, and continued loan expansion provide support for earnings growth, although funding costs and pressure on net interest income remain key factors to monitor.
