February 06, 2025
The Dip of Another Giant

Market Commentary
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BMRI, a cornerstone of Indonesia's banking sector, saw its stock price decline by 7.7% on February 6th, 2025. This drop was one of the most pronounced single-day losses for the stock in recent years, sparking concerns among investors and market analysts alike. 

This sharp decline not only eroded shareholder value but also raised questions about the underlying causes of such a significant sell-off.

Foreign investors played a pivotal role in the day's events. On February 6th, the net foreign sell on BMRI amounted to IDR 1.4 tn, marking one of the highest single-day foreign sell-offs for the stock in recent history. 
 
BMRI 6 February Trading Datas

Domestically, concerns over slowing economic growth and regulatory changes in the banking sector further exacerbated the sell-off, as seen from BMRI's earnings result.

We believe BMRI's share price dip was mainly contributed by the concern on its FY24 earnings result.

Despite a slight improvement on its NIM to 5.15% in 4Q24, BMRI’s 4Q24 earnings weakened, with net profit declining to Rp13.8tn (-14% YoY, -11% QoQ) due to higher provisions and increased opex.
 

That said, FY24 profit remained flat at IDR 55.8tn (+1% yoy), supported by strong 20% loan growth.

The bank has established an ambitious loan growth target of 10–12% for 2025F, despite challenging liquidity conditions, with the objective of reducing its LDR to 90%. Concurrently, credit costs are anticipated to increase to a range of 1.0–1.2%.
 


In light of these developments, we have revised our earnings forecast downward, projecting a year-on-year profit growth of 3% to IDR 57.4tn for 2025F. Additionally, We maintain our BUY recommendation as we adjust our target price to IDR 7,100 per share.

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