Sector Update  /  Banks  /    Click here for full PDF version 
 Author:   Jovent Muliadi  ; Axel Azriel 

• Big 4 banks' net profit of Rp51.2tr in 1Q26 (+11% yoy) came in-line. PPOP grew +8% yoy, primarily led by
  BBNI
  /BMRI at +12/10% yoy.
• All banks recorded lower NIM except for
  BBRI
  (+20bp yoy), dragged by lower loan yield but was offset by improving CoF (-10bp to -65bp yoy).
• Asset quality was broadly stable but weakness in consumer was observed across banks. We maintain OW with
  BBNI
  and
  BMRI
  as our top picks.

In-line 1Q26 results across big 4 banks;

BBNI

/BMRI led the PPOP growth
Aggregate big 4 banks net profit of Rp51.2tr in 1Q26 (+11% yoy) was in-line at 25/26% of ours/cons, sourced from

BMRI

(+17% yoy) and

BBRI

(+14% yoy, due to low base effect in 1Q25 at -14% yoy). PPOP rose +8% yoy, led by

BBNI

(+12% yoy) and

BMRI

(+10% yoy). This was driven by decent NII (+9% yoy, with all SOE banks posted double-digit NII growth (11-12%) while

BBCA

came flattish yoy. Opex remained manageable at +8% yoy. Provision came flat amid drop in

BMRI

at -20% yoy and

BBRI

at -1% yoy, though

BBCA

and

BBNI

rose higher at +20/37% yoy amid their precautionary stances.
Overall NIM was dragged down by lower loan yield; but was partly offset by improving CoF
Most banks recorded NIM compression in 1Q26, led by

BBCA

(-40bp yoy),

BBNI

(-30bp yoy), and

BMRI

(-5bp yoy), except for

BBRI

which expanded by +20bp yoy. This was mostly dragged by lower loan yield (-30bp to -50bp yoy across big 4 banks), mainly due to lower reference rate within corporate segment and Agrinas loan for the SOEs. In terms of CoF, all big 4 banks already posted notable improvement, led by

BBRI

(-65bp yoy) and

BMRI

(-42bp yoy). All banks maintained their FY26F NIM guidance except for

BMRI

(from 4.6-4.8% to 4.5-4.7%) amid BSI deconsolidation & lower loan yield.
Robust loan expansion within SOE banks from Agrinas loans
Aggregate big 4 loans grew +14% yoy, with SOE banks posted robust growth of +14% to +20% yoy from Agrinas loan disbursement while

BBCA

was slower at +6% yoy. On the funding front, deposits grew solid by +17% yoy with balanced growth across TD (+22% yoy) and

CASA

(+15% yoy - contributed primarily by CA at +23% yoy vs. SA of +8% yoy as Agrinas hasn't fully disbursed the loan).
Slight qoq LAR increase from consumer though overall NPL came stable
Overall asset quality was relatively stable for the big 4 banks.

BMRI

posted the qoq improvement in LAR (-48bp qoq), while slight hiccups were seen in

BBRI

(+7bp qoq),

BBNI

(+10bp qoq), and

BBCA

(+30bp qoq), sourced mostly from downgrade within the consumer and SME segments. In terms of NPL, only

BBCA

rose by +10bp qoq while

BBNI

came flat,

BBRI

down by -7bp qoq, and

BMRI

improved by -11bp qoq. CoC for all banks were still in-line with their guidance except for

BBCA

(higher at 60bp vs. guidance of 40-50bp).
Maintain OW from gradual CoF improvement and resilient asset quality
We maintain our OW stance on banks on the back of strong 1Q earnings and attractive valuation. The sector is currently trading at attractive valuation of 1.5x FY26F P/B and 8.2x P/E vs. 10Y avg of 2.2x and 14.4x. Our top picks are

BBNI

and

BMRI

. Key risk is prolonged geopolitical tensions which could lead to slower-than-expected loan growth and deterioration in asset quality.


Sumber : IPS