By: A. Mikail Mo, Research Fellow at The Asian Institute for Economic and Capital Markets
Jakarta – The race does not seem to be over, even though it is nearing the finish line. PT Bank Rakyat Indonesia or BRI (BBRI), which has been the biggest profit-earning champion for the last 20 years, although still the profit champion (bank only), is starting to look “tired”. Last year, BBRI’s profit reached Rp54.84 trillion. The difference was only Rp130 billion from PT Bank Central Asia or BCA (BBCA) which achieved a profit of Rp54.71 trillion. Meanwhile, PT Bank Mandiri (BMRI) achieved a profit of IDR 51.14 trillion. Is this a sign that BBRI has lost its energy in the race for the profit champion?
If you look at the published financial statements, the big banks or KBMI 4 banks are really interesting. There is a tendency for big profits by breaking up the “semar piggy bank” to maintain jumbo profits. The banks included in KBMI 4 are BMRI, BBRI, BBCA, and PT Bank Negara Indonesia or BNI (BBNI). The first three banks mentioned are banks that excite each other in the race to achieve profits, understandably the size of their assets is not much different compared to BBNI which is in fourth position.
According to data from The Asian Institute for Economic and Capital Market (AIEC-Market), for banks only, BMRI’s assets amounted to Rp1,877 trillion (11.2 percent), BBRI amounted to Rp1,840 trillion (0.28 percent), BBCA amounted to Rp1,406 trillion (2.6 percent). As for loans, BMRI reached Rp1,310 trillion (20.72 percent), BBRI 1,215 trillion (6.1 percent) and BBCA Rp895 trillion (13.6 percent). While BMRI’s public funds amounted to Rp1,326 trillion (6.82 percent), BBRI amounted to Rp1,360 trillion (0.6 percent), and BBCA amounted to Rp1,108 trillion (2.5 percent).
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BBRI’s asset, fund and loan growth figures appear to be lagging behind. Why does BBRI seem to be “exhausted” to achieve profits? Over the past two years, it appears that BRI’s profit engine has begun to slow down. Just look, in 2024, the growth of assets, credit and public funds and more disturbing profits is the growth of net interest income (NII). Also, including the ability to provide reserves (provision).
In the last two years, although BBRI (bank only) has been the profit champion, it has been outpaced by BBCA. In fact, with its rival BMRI. I don’t know what happened, or is it because BBCA and BMRI are already exhausted, because the engine is not running properly?
Many questions need to be raised, as it is unusual for BBRI to be as slow as it has been in the past two years. Has it lost its expertise in the micro, small and medium credit market, or is the market saturated? It’s not easy to answer, but at least the financial numbers reflect BBRI’s condition.
Surprisingly, BBRI’s NII only grew by 0.4 percent. That’s because interest expenses rose double digit by 33 percent, while interest income only grew by 8.8 percent. More dizzying, because BBRI’s third party funds (DPK) only grew 0.6 percent and credit grew 6.1 percent. Plus BBRI’s assets only grew 0.3 percent. Perhaps BBRI is just “circling” in a field that has begun to be dominated by other, more energetic players. In fact, NII growth over the past three years has slowed down, and NII growth in 2024 is the slowest post-COVID-19.
Moreover, according to the records of The Asian Institute for Economic & Capital Market (AIEC-Market), the position of NII, credit growth, deposits and assets is the worst growth since the last 20 years. Moreover, if you look further, in BBRI’s history, every increase in credit has always made more adequate reserves. Or, in short, as credit grows, the provision also gets bigger. That is BBRI’s history. But, the 2024 position is just the opposite, from Rp77 trillion to Rp70.8 trillion.
Well, compare with BBCA and BMRI which seem to run fast. For example, BBCA is definitely close to BBRI’s profit and only a difference of Rp130 billion. Its credit growth reached 13.8 percent and its assets grew 2.9 percent. While BMRI is more aggressive in lending 19.5 percent, although DPK only grew 7.73 percent, but BMRI’s fund growth was the highest compared to BBRI and BBCA.
Clearly. It appears that BBRI in 2024 is exhausted in reaching profits. It is normal that BBRI still wants to maintain the largest profit since 20 years ago until now. In 2024, it is still a profit champion, only something needs to be done. Interest income only grew 0.4 percent, but the cost of funds grew 82 times. This is clearly a problem. It could also be due to less intelligent fund management, because during 2022-2024, BBRI’s interest expense jumped 124 percent, but only generated 4.5 percent growth in deposits. Wasteful.
When compared to BMRI and BBCA, BBRI’s fund management is inferior. Look at BMRI over the past two years, the growth in deposits was 11.21 percent, while the growth in cost of funds was 110.85 percent. And, the best at managing funds is BBCA, although its DPK only grew 8.33 percent, but the cost of funds only grew 47.50 percent. Well, if this condition continues, it is almost certain that BBRI’s profit (bank only) will be overtaken by BBCA at the end of the first semester of 2025.
Another thing can also be mentioned that the pressure of non-performing loans (NPL) is still there, although the NPL position of BBRI has decreased compared to the previous year (2023). The NPL position in 2024 was 2.94 percent, or down compared to 2023 of 3.12 percent. Although down, but compared to BBCA whose NPL is only 1.78 percent, or with BMRI which is only 0.97 percent. Obviously BBRI’s non-performing loans are still the best compared to the three competing banks.
Although the three jumbo banks, BMRI and BBCA reduced NPL coverage, BBRI was the lowest in NPL coverage. While BMRI and BBCA are still above 200 percent. According to the data, BBRI’s NPL coverage over the past three years has continued to decline. In 2022 it was 291.3 percent, then decreased to 215.27 percent and finally below 200 percent, more precisely 198.34 percent. In fact, NPL coverage in 2024 is the lowest since 2020.
Are there signs of BBRI’s profit because it broke the “semar piggy bank” so that it is still a profit champion?
BRI Shares are the Most Avalanche
BRI’s financial performance in 2024 did not light up once, although it was still able to score the largest profit in Indonesia. It’s just that the savings from the “semar piggy bank” have begun to be broken down. Please go ahead if the NPL coverage ratio is increased, it is certain that BBRI’s profit will not be that big, especially since NII is deflated, interest income is “slow” and interest costs are flying high.
In line with that, BBRI shares are also falling. When compared to the stocks of banks that have gone public in Indonesia (KBMI 3 and KBMI 4), BBRI stock is the biggest loser. In the past year, from February 19, 2024 to February 19, 2025, BBRI shares have lost 34.10 percent. Meanwhile, BBCA only fell 9.37 percent and BMRI by 27.62 percent and BBNI by 23.06 percent.
Well, with such a large decline in share prices, the market capitalization also collapsed. In the period 19/2/2024, BBRI’s market capitalization reached Rp915.265 trillion, slipping to Rp478.170 trillion. So the potential investor money collapsed by IDR 437.095 trillion. According to some analysts, it can be seen from two sides, namely the time to buy BBRI shares because the valuation is very cheap. In addition, BBRI’s financial performance despite achieving the largest profit, but because the structure of its profit sources is still inferior to BBCA and BMRI.
If you want to be more detailed, according to AIEC-Market data on red and white ownership or the Indonesian government, with a 34.10 percent decline in shares, the potential decline in the value of government shares also fell by that much. If converted, at least the value of the Indonesian government’s ownership has the potential to fall to the range of Rp232-235 trillion. The remaining 46.19 percent belongs to the public. Or, the potential loss reaches Rp205-210 trillion. The potential loss figure is considered large, because it could be the figure from 10 years of dividend value paid by BBRI to the state in the form of dividends.
As quoted by the media, BRI President Director Sunarso criticized stock analysts on social media for spreading fear to retail investors recently. According to him, negative analysis can disrupt the company’s programs, including education for retail investors to invest sustainably.
It was mentioned that there were stock analysts on social media, such as YouTube, who fried the issue related to the company’s profit stagnation last year with a decline in share prices. The analysis was considered negative because it was made with a bombastic title that scared retail investors. In fact, BBRI’s capital adequacy ratio (CAR) is still strong.
That could be true, but at least the big money owners, or foreign investors, certainly judge stocks not based on analysis from youtubers. Analysts are smarter at reading financial reports. Well, if you look at BBRI’s performance figures, such as NII growth, soaring interest expense growth, the ability to provide NPL coverage and of course important is the ability to increase share value.
Although BBRI achieved the largest profit, it clearly looked “exhausted”. A falling share price is a major concern for shareholders, as the shareholder school of thought is that the best bank is the one that adds value to shareholders. Also, shiny financial performance is fundamental in bank management. Do we need fresh blood to run faster again? Hopefully the “semar piggy bank” is still there to “making up” to shareholders. In the end, analysts have noted the true performance of BBRI which already looks “exhausted”. (*)
