BBTN
Contact our analyst Avanza
11.51% Upside. BUY
25th May 2026
Price Rp1390
Target price Rp1550
Net Profit Growth Expected to Moderate
BBTN delivered a solid performance in 1Q26, with net profit rising 22.6% YoY to IDR 1.1 trillion. Although interest and sharia income declined 2.4% YoY, reflecting continued pressure on asset yields and limited room for margin expansion, a deeper decline in interest and sharia expenses of 14.9% YoY supported a 12.3% YoY increase in net interest and sharia income. Looking ahead, we expect earnings growth to moderate, with FY2026 net profit projected to increase 4.4% YoY, while NIM is forecast to decline by 40 bps YoY to 3.8%, as yield pressure is likely to persist through year-end. This outlook reflects still-challenging global and domestic macroeconomic conditions, which may continue to limit margin recovery in the near term.
Loan Portfolio Growth Remains Solid
BBTN recorded solid growth in its loan and sharia financing portfolio, which increased 10.3% YoY to IDR 400.6 trillion in 1Q26. Growth was supported by both the housing segment (+5.9% YoY) and the non-housing segment (+36.8% YoY). Mortgage lending remained the core growth driver, with total mortgage loans increasing 6.8% YoY, supported by 7.7% YoY growth in subsidized mortgages and 5.4% YoY growth in non-subsidized mortgages. Looking ahead, we forecast loan and sharia financing growth of 9.1% YoY in FY2026. In addition to organic growth, the company’s planned acquisition of loan portfolios across both productive and consumer lending segments could provide an additional catalyst for future credit expansion.
Capital Strengthening Supports Strategic Expansion
In April 2026, BBTN decided to retain its entire FY2025 net profit of IDR 3.5 trillion to support future business expansion. The decision aligns with the company’s plan to acquire a loan portfolio with a transaction value exceeding 20% of equity, requiring stronger capital reinforcement. The decision not to distribute dividends also reflects management’s focus on maintaining capital efficiency while preserving flexibility for strategic growth. Management indicated that the targeted loan portfolio offers a superior yield profile and stronger asset quality compared with BBTN’s existing portfolio, which could enhance profitability and improve the overall loan mix. Over the medium term, this expansion strategy is expected to support stronger credit growth, improved asset quality, and better earnings quality.
CASA Growth Continues to Support Funding Efficiency
BBTN recorded CASA growth of 7.9% YoY to IDR 212.2 trillion in 1Q26, supported by an 11.3% YoY increase in current account balances, in line with management’s strategy to improve its low-cost funding mix. Looking ahead, we expect CASA to continue expanding, with FY2026 CASA projected to grow 8.23% YoY, supported by continued efforts to strengthen low-cost fund accumulation and reduce the cost of fund.
Valuation: 11.51% Upside (BUY)
We maintain our BUY recommendation with a revised 12-month target price of IDR 1,550, implying 11.51% upside. Our valuation is based on an updated Dividend Discount Model (DDM) incorporating 1Q26 performance, forward macroeconomic assumptions, and an implied valuation of 0.56x PBV.
