BBRI - 1H25 net income -11.25% yoy

BBRI - 1H25 net income -11.25% yoy Bank Rakyat Indonesia (Persero) (BBRI) reported a net profit of IDR26.53 tn for the first half of 2025, marking an 11.25% decrease yoy from the previous year's IDR29.89 tn. Despite the dip in profit, the bank's core operations showed resilience. Interest income rose 2.6% to IDR102.37 tn, while interest expenses increased by a more modest 2.07% to IDR29.10 tn. This led to a 2.8% yoy rise in net interest income, which reached IDR73.27 tn. Net Interest Margin (NIM) saw a contraction from 6.81% to 6.58%. This indicates that while the bank is generating more interest, the cost of funds is growing at a faster rate, putting pressure on profitability. The decrease in NIM, coupled with other potential factors, likely contributed to the overall decline in net profit. (Source : Cnbc Indonesia). Comment : BBRI reported a quarterly improvement, with PPoP turned to positive despite grew mild (+2.2% yoy vs -2.8% yoy in the previous quarter). Better top line was help by its higher subsidiaries contribution. Provisions saw -10.4% qoq vs +40.9% qoq in the previous quarter, bringing net income declined by 7.8% qoq, or around +157bps better vs last quarter. In all, despite continuing earnings pressure, 1H25 PATMI arrive inline with ours and cons. expectation at 45.8%/45.0% vs 47.2%. Total loans grew by 6.0% yoy, still below ’25 management guidance (7%-9%) and inline with our ‘25F loan growth for BBRI of 5.8% yoy. Amid the tigher liquidity, the bank noted TPF growth of 6.7% yoy, driven mainly by strong CA segment and resulting to a robust CASA growth of 10.6% yoy. NPL arrive 3.0% vs 3.1% in 2Q24, thanks to corporate segment which saw improving numbers from 3.07% to 1.61%. NIM came in at 7.8% and noted a slight improvement on QoQ basis on stronger loan yield and manageable funding cost. We also like CoC progress from 3.5% to 3.4% despite still make a 20bps gap to ‘25F guidance. Worth to note BBRI's 1H25 CoC has reached our ‘25F CoC expectation for BBRI of 3.4%.