BBRI - The pressure of provisioning burden began to ease in Feb25

BBRI - The pressure of provisioning burden began to ease in Feb25 Bank Rakyat Indonesia (BBRI) closed February 2025 with better performance compared to the previous month. Although profits are still down, at least BRI is no longer burdened by higher provisioning costs. As of February 2025, the provision expenses set aside by BRI amounted to IDR8.95 tn, an increase of 6.19% yoy. The increase was not as high as in January 2025. BRI's provisioning burden increased by 188.51% yoy to IDR5.63 tn in January 2025. With the slight increase in provisions, BBRI's profit decline until February was not as sharp as what happened in January 2025, which reached 58.33% yoy. In February 2025, BRI's year-to-date profit on a bank-only basis decreased by around 18% to IDR6.6 tn. On the other hand, the net interest income of this bank, which is familiar to the common people, is still experiencing a correction. In February 2025, its net interest income was recorded at around IDR18.26 tn, which means a slight decrease of about 2.49% yoy. (Source : Kontan) Comment : NII experienced a slight decrease of 2.49% yoy, indicating potential pressures on the bank's core lending activities. BRI significantly front-loaded its provisioning expenses in January 2025, with a massive 188.51% yoy increase. In February 2025, the provisioning increase slowed down considerably, both yoy (6.19%) and mom (59.1%). This suggests a strategic shift in BRI's provisioning approach, aiming to absorb potential loan losses early in the year. We expect a much better March 25 bank only performance and we believe the 1Q25 will become one of the key analyses for BBRI’s ability to reached its ‘25F guidance.