ARTO A Profitable Quarter, Except the Core Bank Actually Lost Money

The Sharia Unit Is Carrying the Whole Bank

Q1 2022 was Bank Jago's first-ever profitable first quarter: net income of Rp18.9 billion, against a Rp38.1 billion loss in Q1 2021. Read as a headline number, it looks like confirmation that the first full year of profit reported three months ago is turning into a durable pattern rather than a one-off.

It isn't quite that clean. Buried in Note 40 of the same financial statements is a figure that never makes it into the earnings presentation: the bank's Sharia business unit - launched only seven months earlier, in September 2021 - earned Rp107.3 billion in net income this quarter on its own, standalone. The consolidated bank as a whole earned Rp18.9 billion. Subtract one from the other and the conventional banking business - the loan book, the deposit franchise, the app, everything that isn't Sharia - lost approximately Rp88.4 billion in the same three months. That's not visible anywhere in the presentation's headline "Remain profitable while Investing for growth" framing, which shows a single consolidated NPBT line climbing from -Rp38bn to Rp42bn to Rp24bn across the last three quarters without ever splitting out where that profit is actually coming from (see Beyond the Usual).

This isn't necessarily a bad allocation of capital - a young Sharia unit converting more than half the loan book into a genuinely high-margin product (Sharia financing yields sit alongside the conventional loan book at broadly similar rates, but the unit is smaller and newer, so proportionally it's earning far more per rupiah deployed) is a real achievement. But it means the "third straight profitable quarter" headline is really a story about one seven-month-old business line inside the bank, not evidence that the core digital-banking thesis - ecosystem lending, the Jago app, GoTo-linked deposits - has itself crossed into sustainable profitability. Loan and Sharia financing balances combined grew 376% YoY to Rp6.15 trillion, and the customer base (2.3+ million KYC-verified users) kept climbing every quarter of this backfill - but the quarter's actual bottom line came from the newest, smallest part of the business.

The Prescription

Keep pushing the Sharia unit's growth - it's now generating a return on its asset base (Rp107.3 billion net income against Rp2.57 trillion in total assets, an implied ~4.2% quarterly ROA) that dwarfs anything the conventional bank has produced in this backfill, and Indonesia's underserved Sharia-banking demand is real, durable distribution the bank earned by building the unit early. Whatever mix of pricing, product, and lower initial overhead is driving that margin is worth understanding well enough to see if any of it can be replicated on the conventional side.

What it should stop doing: presenting a single consolidated profit figure without disclosing the segment split that explains it. A reader has no way to know from the earnings presentation alone that the conventional bank actually lost money this quarter - that information only exists in Note 40 of the full financial statements, a document most readers of the presentation will never open. Disclosing it plainly wouldn't cost the bank anything (it's already required and disclosed in the audited statements), and it would make the "we're profitable" narrative honest instead of just technically true.

Key Financial Metrics

Q1 2022 vs. Q1 2021 - PT Bank Jago Tbk, consolidated

FX: IDR 14,351.0 = USD 1 (March 31, 2022 close); IDR 14,606.0 = USD 1 (March 31, 2021 close, used for Q1 2021 conversions).

Metric	Q1 2022 (IDR)	Q1 2022 (USD)	Q1 2021 (IDR)	YoY
Net interest and Sharia income ("Net Revenue" equivalent)	Rp316,314M	~$22.04M	Rp33,474M	✅ +844.9%
Other operating income	Rp7,907M	~$0.55M	Rp13,073M	⚠️ -39.5%
Provision for impairment losses	-Rp59,872M	-~$4.17M	-Rp6,952M	⚠️ +761.2%, tracking loan book growth and rising NPL
Total other operating expenses	-Rp300,576M	-~$20.95M	-Rp84,895M	⚠️ +254.2%
Operating income/(loss)	Rp23,645M	~$1.65M	-Rp38,348M	✅ First-ever Q1 operating profit
Income before income tax	Rp24,398M	~$1.70M	-Rp38,131M	✅ First-ever Q1 pre-tax profit
Deferred tax expense/(benefit)	-Rp5,463M	-~$0.38M	Rp0M	⚠️ An expense this quarter, not a benefit - see Beyond the Usual
Net income/(loss) for the period	Rp18,935M	~$1.32M	-Rp38,131M	✅ First-ever Q1 net profit - but see above
Earnings/(loss) per share (full amount)	Rp1.37	~$0.0001	-Rp3.51	✅ First-ever positive Q1 EPS
Net cash provided by/(used in) operating activities	Rp659,341M	~$45.94M	-Rp48,462M	✅ First-ever positive Q1 operating cash flow
Total cash and cash equivalents (period-end)	Rp1,709,584M	~$119.13M	Rp7,294,830M	⚠️ Down YoY, but against an unrepeatable base - Mar 2021 cash was still holding most of the Rp7 trillion rights-issue proceeds before they were deployed into loans and securities

Operating income/loss (above) is the equivalent measure for a bank. The operating cash flow swing (from -Rp48.5 billion to +Rp659.3 billion) mostly reflects Rp878.2 billion of reverse repo securities maturing back into cash and Rp657.7 billion of savings-deposit growth, both timing/funding-mix effects rather than a change in the underlying earnings power reflected in the income statement above.

Balance sheet metric	Mar 2022 (IDR)	Mar 2022 (USD)	Dec 2021 (IDR)	QoQ
Total Assets	Rp12,825,240M	~$893.71M	Rp12,312,422M	✅ +4.2%
Loans and Sharia financing (net)	Rp5,970,347M	~$416.09M	Rp5,241,783M	✅ +13.9%
Third-Party Funds (deposits, incl. Sharia mudharabah)	Rp4,214,479M	~$293.75M	Rp3,677,572M	✅ +14.6%
Total Liabilities	Rp4,399,704M	~$306.58M	Rp3,952,606M	⚠️ +11.3%
Temporary Sharia (Syirkah) Funds	Rp157,511M	~$10.98M	Rp110,361M	+42.7%
Total Equity	Rp8,268,025M	~$576.20M	Rp8,249,455M	Essentially flat, +0.2%

The number worth remembering from this quarter isn't "Bank Jago's third straight profitable quarter" - it's that almost the entire profit came from a single seven-month-old business line, and the conventional bank underneath it is still, by the numbers, losing money.

Key Operational Metrics

• CASA ratio^»: ~54.4% (Mar 2022, Rp2,292,307M of Rp4,214,479M total deposits incl. Sharia) vs. 45.6% (Dec 2021) vs. ~26% (Mar 2021, per the company's own presentation, not independently verifiable against this filing since the interim balance sheet's own comparative period is Dec 2021, not Mar 2021) - continuing to climb every quarter of this backfill.
• Loan-to-Deposit Ratio^»: 152% (Mar 2022) vs. 146% (Dec 2021) vs. 133% (Mar 2021, per presentation) - continuing to climb, still funded by the bank's large excess capital rather than deposits alone.
• NIM^» (blended): 11.1% (Q1 2022) vs. 7.7% (Q1 2021) vs. 7.4% (FY 2021) - the highest print in this backfill, as more of the balance sheet sits in loans and Sharia financing rather than treasury assets.
• NIM (loans only): 18.1% (Q1 2022) vs. 9.5% (Q1 2021) vs. 16.1% (FY 2021).
• NIM (treasury assets): 3.6% (Q1 2022) vs. 3.9% (Q1 2021) - continuing to compress slightly as a smaller share of the balance sheet sits in low-yield securities and reverse repos.
• NPL^»: 1.49% gross / 0.39% net (Mar 2022) vs. 0.58%/0.04% (Dec 2021) vs. 0.00%/0.00% (Mar 2021) - the sharpest jump in this backfill, and the first defaults flagged back in Q3 2021 have now more than doubled from last quarter rather than plateauing. Special mention loans (the earliest-stage watchlist category) rose to a combined Rp398.6 billion across the conventional and Sharia books, up from Rp284.7 billion at year-end - still outgrowing the loan book itself, the pattern flagged since the 1H2021 post.
• CAR^»: 130.6% (Mar 2022) vs. 169.9% (Dec 2021) vs. 538.0% (Mar 2021, per presentation) - still falling every quarter as capital gets deployed into risk-weighted loans, though still more than 13x OJK's 10% minimum.
• ROE^»: 1.0% (Q1 2022) vs. -4.5% (Q1 2021) vs. 1.3% (FY 2021); ROA^»: 0.8% (Q1 2022) vs. -3.3% (Q1 2021) vs. 0.1% (FY 2021).
• Cost-to-Income^»: 74% (Q1 2022) vs. 229% (Q1 2021) vs. 89% (FY 2021) - a dramatic YoY improvement, tracking Q4 2021's dip below 80%.
• Cost of Funds (end of period): 3.1% (Mar 2022) vs. 3.2% (Dec 2021) vs. 4.0% (Mar 2021, per presentation) - continuing to fall as CASA share improves.
• Cost of Credit / Average Loan: 4.2% (Q1 2022) vs. 2.7% (Q1 2021) vs. 3.6% (FY 2021) - rising in step with the NPL increase above.
• Related-party loan concentration: 5.37% of the conventional loan book (Mar 2022) vs. 3.11% (Dec 2021) - see Beyond the Usual.
• PT GoTo Gojek Tokopedia's share of current-account deposits: approximately 57.5% (Rp192.4 billion of Rp334.7 billion total current accounts, Mar 2022) vs. 80.2% (Dec 2021) - a genuine easing, continuing the same oscillation first flagged after 9M2021 and reversed by year-end - worth watching again for whether it holds through Q2.
• Headcount: 414 permanent employees at 31 March 2022, up from 371 at year-end - continuing steady hiring alongside the Sharia unit's build-out.
• Branch network: unchanged from December - one non-operational head office, three branches, two sub-branches, no cash office.
• Not available as a clean 31 March figure in the financial statements: the 2.3+ million KYC-verified customer count cited in the company's presentation is "as of" the presentation date rather than the reporting date itself, consistent with every prior quarter in this backfill.

Beyond the Usual

The earnings presentation never discloses that the Sharia unit, not the core bank, produced the quarter's profit

The company's own "1Q 2022 Results Update" presentation shows a single consolidated Net Profit Before Tax line - climbing from -Rp38 billion (Q1 2021) to Rp42 billion (Q4 2021) to Rp24 billion (Q1 2022) - with no segment breakdown anywhere in the deck. Only the full financial statements, in Note 40, disclose that the Sharia business unit alone earned Rp107.3 billion in net income this quarter, against Rp18.9 billion for the consolidated bank as a whole - meaning the conventional banking business lost approximately Rp88.4 billion in the same period (see above). This isn't misstated or non-compliant - the segment note is filed exactly as required - but a reader relying on the presentation alone, which is what most investors and journalists actually read, would have no way to know the "profitable quarter" headline rests almost entirely on one seven-month-old unit rather than the digital-banking core the bank markets itself on.

A second related-party loan appeared, and related-party loan concentration nearly doubled

The FY2021 post reported a Rp100 billion related-party loan to PT Trimegah Sekuritas Indonesia Tbk that reappeared after being fully repaid earlier in 2021. That loan is unchanged this quarter at Rp100.0 billion, but a second related-party borrower has now joined it: PT GOFIN Karya Anak Bangsa, a company under common ownership with Bank Jago's own shareholders, drew a Rp100.0 billion loan (recorded at Rp99,997 million) that didn't exist at year-end. Combined, related-party loans now total Rp199,997 million, or 5.37% of the conventional loan book - up from 3.11% three months ago. Neither loan's purpose, rate, or term is disclosed beyond the standard related-party note. Two related-party lending relationships appearing in successive backfilled quarters, after the first one was flagged as reopened following a full repayment, is now enough of a pattern to call a pattern rather than a one-off.

Undrawn loan commitments grew faster than the loan book itself

Unused loan facilities extended to customers but not yet drawn down grew to Rp685.2 billion at 31 March 2022, up 53.4% from Rp446.6 billion three months earlier - faster growth than the 13.9% increase in loans actually funded. This is a normal and disclosed off-balance-sheet commitment, not a concern on its own, but it's a genuine forward indicator: the bank has already committed to funding considerably more credit than what's currently on its balance sheet, which will show up as loan growth (and the accompanying provisioning) in coming quarters regardless of whether new commitments are extended.

The deferred tax asset shrank for the first time, as fiscal losses got used up rather than newly recognized

The FY2021 post flagged that 89% of that year's net income came from a one-time deferred tax asset recognition. This quarter runs the tape the other way: the bank recorded a Rp5.5 billion deferred tax expense, as Rp7.9 billion of the previously-recognized unutilized fiscal-loss pool was used up against this quarter's now-taxable Sharia-driven profit, shrinking the remaining deferred tax asset from Rp77.5 billion to Rp72.1 billion. This is exactly the mechanical unwind the FY2021 post said to expect - the one-time credit doesn't repeat, and using up the loss pool against real taxable income is the normal, unremarkable next step once a bank actually starts generating taxable profit.

Target Valuation Range

Market cap Rp202.99 trillion (~$14.14 billion), ~24.6x P/B, ~>2,600x P/E. Bottom line: still priced almost entirely on the ecosystem story, not the numbers - and this quarter's numbers are a weaker foundation for that story than the headline suggests, since the profit driving them came from a single new business line rather than the core lending franchise the market is actually betting on.

Bank Jago's shares closed at approximately Rp14,650 on 31 March 2022, down 8.4% from Rp16,000 three months earlier - the first quarter-over-quarter decline in this backfill, though still up enormously from any point before mid-2020. No stock split has occurred at any point since the company's IPO, so this remains the actual nominal price quoted on the IDX at the time, not a split-adjusted figure. At 13,856,250,000 shares outstanding (unchanged since the March 2021 rights issue), that implies a market capitalization of approximately Rp202.99 trillion (~$14.14 billion).

Market cap → book value	Q1 2022
Share price (period-end)	Rp14,650
Shares outstanding	13,856,250,000
Market capitalization	Rp202.99 trillion (~$14.14 billion)
Total equity (book value)	Rp8,268,025M
Book value per share	Rp596.71

Peer-multiple sanity check	Q4 2021	Q1 2022	Change
P/B	26.9x	24.6x	down
P/E	2,469x	>2,600x	up

P/B^»: ~24.6x, using book value^» per share of Rp596.71 (Rp8,268,025M total equity ÷ 13,856,250,000 shares) - down from ~26.9x three months ago, a modest de-rating driven mostly by the lower share price rather than any change in book value, which barely moved this quarter. P/E^»: technically positive for a third straight period, but still economically meaningless at the implied multiple - annualizing this quarter's Rp1.37 EPS (×4) gives Rp5.48, for an implied P/E north of 2,600x. Stripping out the Sharia-vs-conventional split flagged above, the conventional bank's own quarter was a loss, so no clean "core" P/E exists yet. A full DCF still isn't appropriate here, for the same reason as every prior quarter in this backfill: three profitable quarters out of nine since the "Becoming Jago" transformation began, with the most recent one concentrated almost entirely in a single new business line, doesn't establish the kind of multi-year earnings trajectory a DCF's terminal-value assumptions could responsibly absorb. The honest read stays the peer-multiple one: a ~25x book multiple prices in years of durable, ecosystem-wide earnings power that this quarter's own numbers don't yet demonstrate - the profit is real, but its source is narrower than the market narrative assumes.

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