Company Report | [BBRI] Switching Focus for a Moment: Improving Asset Quality

Coal Average Selling Price Increase

As of 1H24, BBRI posted a net profit of IDR 29.90T, which experienced a significant slowdown on a quarterly basis and posted a profit of IDR 13.91T in 2Q24 (+1.1% YoY 1H23: IDR 29.56T & -12.9% QoQ 1Q24: IDR 15.98T). The weakening performance was also evident from BBRI’s Net Interest Margin (NIM) which contracted by -28Bps YoY to 7.64% 1H24 (1H23: 7.92%), where tight liquidity policy which triggered a stronger increase in Cost of Fund (CoF) eroded BBRI’s asset yield. Despite this, BBRI’s Net Interest Income still grew +6.7% YoY to IDR 69.93T in 1H24, and PPOP still grew +11.7% in 1H24 to IDR 57.04T. What is still a challenge for BBRI is the asset quality of BBRI, where BBRI’s provisioning costs still increased +33.8% YoY to IDR 18.5T in 1H24. However, on QoQ basis, provisioning cost has started to flatten -27.3% QoQ to IDR 7.78T in 2Q24 (1Q24: IDR 10.71T). We see, BBRI’s shift in focus to more conservative corporate loans and improvement in asset quality as seen from Cost of Credit (CoC) that has started to flatten is a good first step to recovery amidst tight liquidity.

Asset Growth

As of 1H24, BBRI posted a net profit of IDR 29.90T, which experienced a significant slowdown on a quarterly basis and posted a profit of IDR 13.91T in 2Q24 (+1.1% YoY 1H23: IDR 29.56T & -12.9% QoQ 1Q24: IDR 15.98T).