Coverage: weekly note · Information to 26 August 2024
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TGB Weekly Research Note · 26 August 2024
Profit attributable to shareholders at BRI, BCA, Bank Mandiri and BNI rose 5.2% in the first half of 2024, but BCA supplied 57% of the increase as funding costs rose much faster at the other three.
The desk view
BRI, BCA, Bank Mandiri and BNI reported combined profit attributable to shareholders of Rp93.8 trillion for the first half of 2024, up 5.2% on a year earlier. BRI remained the largest earner at Rp29.70 trillion, but BCA contributed 57% of the combined increase. The split tracks funding costs: interest expense rose by more than a third at BRI, Bank Mandiri and BNI, against 10.4% at BCA. Our reading is that lower impairment charges carried BNI's profit growth and supported Bank Mandiri's as margins narrowed.
BRI stays largest as BCA drives the gain
BRI earned Rp29.70 trillion attributable to shareholders in the six months to June 2024, ahead of BCA at Rp26.88 trillion, Bank Mandiri at Rp26.55 trillion and BNI at Rp10.69 trillion. BCA's profit rose 11.1%, Bank Mandiri's 5.2%, BNI's 3.8% and BRI's 1.0%. BCA added Rp2.7 trillion of the combined Rp4.7 trillion increase; BRI added Rp0.3 trillion.
The ranking depends on the measure. Including non-controlling interests, Bank Mandiri's total profit was Rp29.27 trillion, against Rp29.90 trillion at BRI and Rp26.88 trillion at BCA, which puts Bank Mandiri second.
H1 2024 profit to shareholders, Rp trillion
Source: PT Bank Rakyat Indonesia (Persero) Tbk, Interim consolidated financial statements as of June 30, 2024 and for the six-month period then ended (English version), 25 July 2024; PT Bank Central Asia Tbk, Consolidated financial statements 30 June 2024 (unaudited, bilingual), 24 July 2024; PT Bank Mandiri (Persero) Tbk, Published consolidated financial statements as of 30 June 2024 (English version), 31 July 2024; PT Bank Negara Indonesia (Persero) Tbk, Interim consolidated financial statements 30 June 2024 (bilingual), 21 August 2024.
Funding costs split the group
The Otoritas Jasa Keuangan (OJK) said the banking system's net interest margin fell from 4.8% in June 2023 to 4.57% in June 2024, as deposit rates trended upward while lending rates were relatively flat.
Interest expense, including sharia expense where reported, rose 43.2% at BRI, 37.1% at Bank Mandiri and 35.2% at BNI, against 10.4% at BCA. BCA said current and savings accounts made up more than 82% of its third-party funds. At BNI, net interest income fell 7.4%. BCA's loans grew 15.5% and BRI's 11.20%, against the 12.36% system rate OJK reported for June 2024. BCA therefore paired faster lending with a far smaller rise in funding costs.
Big four banks, H1 2024 results
| Bank | Profit to shareholders, Rp trn | Change on H1 2023 | Interest expense change |
|---|---|---|---|
| BRI | 29.70 | 1.0% | 43.2% |
| BCA | 26.88 | 11.1% | 10.4% |
| Bank Mandiri | 26.55 | 5.2% | 37.1% |
| BNI | 10.69 | 3.8% | 35.2% |
| Total | 93.82 | 5.2% | n/a |
Source: PT Bank Rakyat Indonesia (Persero) Tbk, Interim consolidated financial statements as of June 30, 2024 and for the six-month period then ended (English version), 25 July 2024; PT Bank Central Asia Tbk, Consolidated financial statements 30 June 2024 (unaudited, bilingual), 24 July 2024; PT Bank Mandiri (Persero) Tbk, Published consolidated financial statements as of 30 June 2024 (English version), 31 July 2024; PT Bank Negara Indonesia (Persero) Tbk, Interim consolidated financial statements 30 June 2024 (bilingual), 21 August 2024.
Provisions did the rest
Lower impairment charges helped elsewhere: Bank Mandiri's consolidated charge fell 8.5% and BNI's 22.2%. Bank Mandiri's consolidated net interest and sharia income still rose 3.8%, though its bank-only net interest margin narrowed to 4.92% from 5.30%. BRI went the other way: its net provision for impairment of financial assets rose 52.3% to Rp21.35 trillion, offset in part by recoveries of written-off assets, which increased to Rp10.08 trillion from Rp6.70 trillion.
BRI reported a non-performing loan (NPL) ratio of 3.05% and BCA 2.2%. On a bank-only basis, Bank Mandiri's gross NPL ratio was 1.01% against 1.53% a year earlier, and BNI's 1.98% against 2.45%.
The half-year shows two routes to profit growth in a higher-rate setting: a low-cost deposit franchise, as at BCA, or lower provisioning, which carried BNI and helped Bank Mandiri. The second is less durable if credit costs turn, so the provisioning line is the figure to watch.
Primary sources: PT Bank Rakyat Indonesia (Persero) Tbk, Interim consolidated financial statements as of June 30, 2024 and for the six-month period then ended (English version), 25 July 2024; PT Bank Mandiri (Persero) Tbk, Published consolidated financial statements as of 30 June 2024 (English version), 31 July 2024; PT Bank Central Asia Tbk, Consolidated financial statements 30 June 2024 (unaudited, bilingual), 24 July 2024; PT Bank Negara Indonesia (Persero) Tbk, Interim consolidated financial statements 30 June 2024 (bilingual), 21 August 2024; Otoritas Jasa Keuangan (OJK), Siaran Pers SP-109/GKPB/OJK/VIII/2024: Stabilitas Sektor Jasa Keuangan yang Terjaga dan Kinerja Intermediasi yang Kuat Sebagai Daya Dukung Perekonomian Nasional, 5 August 2024; PT Bank Central Asia Tbk, BCA's Loans Grew 15.5%, Positive Performance across All Segments (press release), 24 July 2024; PT Bank Rakyat Indonesia (Persero) Tbk, Tumbuh Selektif dan Prudent, BRI Cetak Laba Rp29,90 Triliun (press release, BRI PPID news page), 25 July 2024; PT Bank Negara Indonesia (Persero) Tbk, Laporan Keuangan Konsolidasian Periode 30 Juni 2024 (2Q24 Laporan Publikasi), 22 August 2024.