BMRI
Contact our analyst achmadi
23.20% UPSIDE, Buy
25th February 2025
Price Rp 4,870
Target Price Rp 6,000
Relatively Stagnant PATMI Growth
In 2024, BMRI’s Profit After Tax and Minority Interest (PATMI) saw minimal growth, increasing 1.31% YoY to IDR 55.78 trillion. This stagnation was primarily due to a 37.07% YoY increase in interest expenses, leading to a 33-bps YoY decline in the Net Interest Margin (NIM) to 5.15%, despite 12.51% YoY growth in interest income, which remained within the bank’s target range. Additionally, operating expenses rose 8.80% YoY, but income from FVTPL and gains on the sale of securities and government bonds (net) helped offset further declines, growing 29.06% YoY and 19.95% YoY, respectively. Without these gains, PATMI growth could have turned negative. We project BMRI’s PATMI to reach IDR 61.20 trillion by year-end 2025, reflecting a 9.72% YoY growth, with the NIM expected to decline slightly to 5.01%, aligning with internal targets.
Strong Loan Growth Surpassing Internal Targets, Driven by ESG Commitments
BMRI once again exceeded on its internal consolidated loan growth target, recording a 19.49% YoY increase (target: 16%-18%), reaching IDR 1,670.55 trillion. Corporate loans surged 26.53% YoY, with the Land Transportation segment posting the highest growth at 81% YoY. In absolute terms, Financial Services led loan expansion, adding IDR 16 trillion in new loans. Sustainable financing grew 10.8% YoY, with Sustainable Agriculture contributing 8.5% and Renewable Energy 0.9% of total loans. These figures reinforce BMRI’s strong ESG commitment, integrating sustainability into its lending practices. By year-end 2025, we forecast BMRI’s loan portfolio to grow 11.14% YoY to IDR 1,856.62 trillion, aligning with internal targets, supported by a focus on CASA growth.
Improved Asset Quality
As of December 2024, BMRI’s consolidated gross non-performing loan (NPL) ratio improved to 1.12%, marking a 7-bps YoY improvement. The corporate segment remained the healthiest, with a gross NPL ratio of 0.36%, down 3 bps QoQ, although it was 5 bps higher YoY. The commercial segment showed the most significant improvement, with its NPL ratio declining by 150 bps YoY to 1.10%. However, the micro segment deteriorated, with its NPL ratio rising by 57 bps YoY to 1.94%. We forecast further improvement in asset quality, expecting the consolidated gross NPL ratio to decline to 1.05% by year-end 2025.
Robust Liquidity Driven by Digital Innovation
BMRI maintained strong liquidity, supported by the digital transformation, leading to a 7.73% YoY increase in customer deposits. Current Accounts grew 3.60% YoY. Savings Accounts surged 13.37% YoY. Time Deposits increased 5.54% YoY. This resulted in a 50-bps YoY increase in BMRI’s CASA ratio to 74.80%. Notably, bank-only savings accounts grew 13.4% YoY, outperforming the industry average, largely due to the success of Livin’ Mandiri. Livin’ Mandiri registered accounts rose 29.1% YoY, reaching 29 million users. We forecast customer deposits to grow 10.11% by December 2025, with the CASA ratio increasing to 75.24%.
Valuation: 23.20% Upside, Buy
Based on FY-2024 performance and a Multi-Stage Dividend Discount Model (DDM), we revise our target price to IDR 6,000, implying a 1.63x PBV valuation and 23.20% upside potential. We maintain our Buy recommendation.
In 2024, BMRI’s Profit After Tax and Minority Interest (PATMI) saw minimal growth, increasing 1.31% YoY to IDR 55.78 trillion. This stagnation was primarily due to a 37.07% YoY increase in interest expenses, leading to a 33-bps YoY decline in the Net Interest Margin (NIM) to 5.15%, despite 12.51% YoY growth in interest income, which remained within the bank’s target range. Additionally, operating expenses rose 8.80% YoY, but income from FVTPL and gains on the sale of securities and government bonds (net) helped offset further declines, growing 29.06% YoY and 19.95% YoY, respectively. Without these gains, PATMI growth could have turned negative. We project BMRI’s PATMI to reach IDR 61.20 trillion by year-end 2025, reflecting a 9.72% YoY growth, with the NIM expected to decline slightly to 5.01%, aligning with internal targets.
Strong Loan Growth Surpassing Internal Targets, Driven by ESG Commitments
BMRI once again exceeded on its internal consolidated loan growth target, recording a 19.49% YoY increase (target: 16%-18%), reaching IDR 1,670.55 trillion. Corporate loans surged 26.53% YoY, with the Land Transportation segment posting the highest growth at 81% YoY. In absolute terms, Financial Services led loan expansion, adding IDR 16 trillion in new loans. Sustainable financing grew 10.8% YoY, with Sustainable Agriculture contributing 8.5% and Renewable Energy 0.9% of total loans. These figures reinforce BMRI’s strong ESG commitment, integrating sustainability into its lending practices. By year-end 2025, we forecast BMRI’s loan portfolio to grow 11.14% YoY to IDR 1,856.62 trillion, aligning with internal targets, supported by a focus on CASA growth.
Improved Asset Quality
As of December 2024, BMRI’s consolidated gross non-performing loan (NPL) ratio improved to 1.12%, marking a 7-bps YoY improvement. The corporate segment remained the healthiest, with a gross NPL ratio of 0.36%, down 3 bps QoQ, although it was 5 bps higher YoY. The commercial segment showed the most significant improvement, with its NPL ratio declining by 150 bps YoY to 1.10%. However, the micro segment deteriorated, with its NPL ratio rising by 57 bps YoY to 1.94%. We forecast further improvement in asset quality, expecting the consolidated gross NPL ratio to decline to 1.05% by year-end 2025.
Robust Liquidity Driven by Digital Innovation
BMRI maintained strong liquidity, supported by the digital transformation, leading to a 7.73% YoY increase in customer deposits. Current Accounts grew 3.60% YoY. Savings Accounts surged 13.37% YoY. Time Deposits increased 5.54% YoY. This resulted in a 50-bps YoY increase in BMRI’s CASA ratio to 74.80%. Notably, bank-only savings accounts grew 13.4% YoY, outperforming the industry average, largely due to the success of Livin’ Mandiri. Livin’ Mandiri registered accounts rose 29.1% YoY, reaching 29 million users. We forecast customer deposits to grow 10.11% by December 2025, with the CASA ratio increasing to 75.24%.
Valuation: 23.20% Upside, Buy
Based on FY-2024 performance and a Multi-Stage Dividend Discount Model (DDM), we revise our target price to IDR 6,000, implying a 1.63x PBV valuation and 23.20% upside potential. We maintain our Buy recommendation.
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