Who says that big banks in Indonesia always shoot smoothly? Let’s review how BRI ($BBRI) performs on the stage in the first quarter of 2025. In its report, they recorded a net profit of 13.7 trillion rupiah. However, this turned out to be a decrease of -14% YoY and -9.4% QoQ. “What’s the matter, man? Easy, let’s peel them one by one!
Why is BRI’s Profit Falling?
The main cause of this decline in net profit was the surge in provision expenses which soared to 12.3 trillion rupiah (+15% YoY, +41% QoQ). Analysts previously estimated BRI’s net profit at a higher level, could it be that the 2025 consensus of 23% is too optimistic? In addition, Net Interest Income (NII) and Pre-provision Operating Profit (PPOP) were observed to be flat, down by -2% and -3% YoY, respectively.
Micro-Segmentation: The Challenges Ahead
Although the micro segment is an important market for BRI, unfortunately, credit costs (CoC) this quarter were at the level of 3.5%, well above the 2025 guidance which shows a range of 3-3.2%. Who is to blame? Actually, since January 2025, the management has been trying to increase provisions, and the result? Eits, the CoC for banks alone soared to 5.6%!
On the positive side, what’s wrong with CASA?
Although the micro segment presents challenges, BRI still strives to maintain its performance in the CASA (Current Account Saving Account) sector which grew +7% YoY. On the one hand, their total deposits were observed to be flat (+0.4% YoY). This increased CASA growth successfully supported the reduction in Cost of Fund (CoF) to the level of 3.5%, better than 3.7% last year.
Key Takeaways!
BRI seems to have to evaluate its growth strategy, especially in the micro segment which is currently in the process of being overhauled. Although earnings pressures are still quite significant, CASA’s positive outlook can be a beacon of hope in facing the future. Hopefully, investors can be patient while waiting for concrete steps taken by management in facing the challenges ahead.
Who Else Stole the Spotlight This Quarter?
Speaking of financial statements, there is also an interesting one from Astra International ($ASII) which recorded a net profit of 6.9 trillion rupiah in 1Q25, although it experienced a decrease of -7% YoY. Then Gudang Garam ($GGRM) only achieved a net profit of 104 billion rupiah. So, curious about other companies? Let’s keep an eye on it!
Each figure and report gives a different picture. In the midst of the existing challenges, there is still hope that can be a bright light for future investment. What is your response to BRI’s performance this time?