ARTO A Seven-Month-Old Unit Earned 6x the Bank's Profit While the Stock Got Cut in Half

A Seven-Month-Old Unit Now Carries the Whole Bank, More Than Ever

H1 2022 was Bank Jago's first-ever profitable first half: consolidated net income of Rp28.9 billion, against a Rp46.8 billion loss in H1 2021. Read on its own, it looks like the first profitable quarter reported three months ago has become a genuine half-year trend.

It hasn't - it's actually gotten more lopsided. Note 40 of the interim financial statements discloses that the Sharia business unit - launched in September 2021, so still under a year old - earned Rp177.9 billion in standalone net income this half. That's more than six times the consolidated bank's entire Rp28.9 billion profit. Subtract one from the other and the conventional banking business - the loan book, the deposit franchise, the app - lost approximately Rp148.9 billion in the same six months. The Q1 2022 post flagged the same structure at a smaller scale (Sharia earned Rp107.3 billion against a Rp18.9 billion consolidated total, roughly 5.7x); running the same math on Q2 alone, standalone, shows the gap widening further: the Sharia unit earned an estimated ~Rp70.6 billion in Q2 alone (H1's Rp177.9 billion less Q1's Rp107.3 billion), against a consolidated Q2 profit of only ~Rp10.0 billion (H1's Rp28.9 billion less Q1's Rp18.9 billion) - a ~7.1x ratio, up from Q1's own 5.7x. The earnings presentation's headline "Maintain Positive Quarterly NPBT" chart still shows one consolidated pre-tax profit line climbing from -Rp9 billion to Rp13 billion across the last five quarters, with no segment split anywhere in the deck (see Beyond the Usual).

This isn't a criticism of the Sharia unit itself - a business earning a 14.15% return on assets (see Key Operational Metrics) in its first year of operation is a genuinely strong result, and Indonesia's underserved Sharia-banking demand is real. But it means "first profitable half-year" is really a story about one young business line, not evidence that the core digital-banking thesis - ecosystem lending, the Jago app, GoTo-linked deposits - has itself turned the corner. And this quarter the market seemed to notice something: the stock fell 37.5% (see The Stock's Worst Quarter in This Backfill), its sharpest decline yet.

The Prescription

Keep building the Sharia unit's scale advantage while it's still available - a 14.15% ROA in year one, against a conventional-bank ROA that's barely positive after two years of "Becoming Jago," is not a small edge, and Indonesia's Sharia-banking segment has room to grow well beyond what any single competitor has captured. Whatever combination of product mix, lower initial cost base, and underserved demand is producing that margin deserves real investment before competitors close the gap.

What it should stop doing: relying on a single consolidated NPBT chart in its investor materials while the segment note that actually explains the number sits unread in a 99-page filing. This isn't new - the Q1 2022 post made the same point - but the gap between the presentation's story and the segment note's story only widened this quarter, and disclosing it plainly costs the bank nothing since it's already filed and audited.

Key Financial Metrics

H1 2022 vs. H1 2021 - PT Bank Jago Tbk, consolidated

FX: IDR 14,921.9 = USD 1 (June 30, 2022 close); IDR 14,601.6 = USD 1 (June 30, 2021 close, used for H1 2021 conversions).

Metric	H1 2022 (IDR)	H1 2022 (USD)	H1 2021 (IDR)	YoY
Net interest and Sharia income ("Net Revenue" equivalent)	Rp641,083M	~$42.96M	Rp139,081M	✅ +361.0%
Other operating income (fees + other income)	Rp18,345M	~$1.23M	Rp20,536M	⚠️ -10.7%
Provision for impairment losses	-Rp167,844M	-~$11.25M	-Rp20,127M	⚠️ +734.0%, tracking the loan book's growth and rising NPL
Total other operating expenses (personnel, promotion, other)	-Rp456,268M	-~$30.58M	-Rp183,332M	⚠️ +148.9%
Operating income/(loss)	Rp35,316M	~$2.37M	-Rp43,842M	✅ First-ever H1 operating profit
Income before income tax	Rp37,290M	~$2.50M	-Rp46,776M	✅ First-ever H1 pre-tax profit
Deferred tax expense/(benefit)	-Rp8,372M	-~$0.56M	Rp0M	⚠️ An expense, not a benefit - see Beyond the Usual
Net income/(loss) for the period	Rp28,918M	~$1.94M	-Rp46,776M	✅ First-ever H1 net profit - but see above
Earnings/(loss) per share (full amount, basic)	Rp2.09	~$0.0001	-Rp3.69	✅ First-ever positive H1 EPS
Net cash provided by/(used in) operating activities	Rp1,649,340M	~$110.53M	-Rp3,747,373M	✅ Swung from a large outflow to a large inflow
Total cash and cash equivalents (period-end)	Rp2,012,562M	~$134.87M	Rp3,006,528M	⚠️ Down YoY, against an unrepeatable base - June 2021 cash still held a large share of the March 2021 rights-issue proceeds before deployment into loans and securities

Operating income/loss (above) is the equivalent measure for a bank. The swing in operating cash flow mostly reflects Rp1,284.0 billion of current-account growth and Rp911.0 billion of savings growth funding the period, alongside Rp1,220.1 billion of reverse-repo securities maturing back into cash - funding-mix and timing effects, not a change in the underlying earnings power the income statement above already shows.

Balance sheet metric	Jun 2022 (IDR)	Jun 2022 (USD)	Dec 2021 (IDR)	Change since FY2021
Total Assets	Rp14,611,943M	~$979.23M	Rp12,312,422M	✅ +18.7%
Loans and Sharia financing (net)	Rp7,044,239M	~$472.07M	Rp5,241,783M	✅ +34.4%
Third-Party Funds (deposits, incl. Sharia mudharabah)	Rp6,099,937M	~$408.79M	Rp3,677,572M	✅ +65.9%
Total Liabilities	Rp6,076,306M	~$407.21M	Rp3,952,606M	⚠️ +53.7%
Temporary Sharia (Syirkah) Funds	Rp258,578M	~$17.33M	Rp110,361M	+134.3%
Total Equity	Rp8,277,059M	~$554.69M	Rp8,249,455M	Essentially flat, +0.3%

The number worth remembering isn't "first-ever profitable half" - it's that the imbalance behind that profit got worse, not better, from Q1 to Q2, and deposits grew almost twice as fast as loans this half, meaning the balance sheet is still gathering funding faster than it's deploying it.

Key Operational Metrics

• CASA ratio^»: 63.5% (Jun 2022, Rp3,872,280M of Rp6,099,937M total deposits incl. Sharia) vs. 45.6% (Dec 2021) vs. ~54.4% (Mar 2022, per the Q1 2022 post) - accelerating, not just continuing, the climb flagged every quarter of this backfill.
• Loan-to-Deposit Ratio^»: 118.81% (Jun 2022) vs. 124.91% (Jun 2021, YoY, per the bank's own filed ratios) vs. 152% (Mar 2022, per the Q1 2022 post) - a sharp QoQ fall, as deposit growth (+65.9% since FY2021) outran loan growth (+34.4%) this half.
• NIM^» (blended): 10.83% (H1 2022) vs. 5.04% (H1 2021) vs. 11.1% (Mar 2022, per the Q1 2022 post) - cooling slightly quarter over quarter (10.6% for Q2 alone, per the company's own presentation) as a fast-growing deposit base outpaces the loan book it's meant to fund.
• NIM (loans only): 16.8% (H1 2022) vs. 10.6% (H1 2021, per presentation).
• NIM (treasury assets): 3.6% (H1 2022) vs. 3.5% (H1 2021, per presentation) - essentially flat.
• NPL^»: 2.70% gross / 1.41% net (Jun 2022, per the bank's own filed ratios) vs. 0.00%/0.00% (Jun 2021) vs. 1.49%/0.39% (Mar 2022, per the Q1 2022 post) - nearly doubled again, the second straight quarter of acceleration after a flat Dec 2021 reading (see Beyond the Usual).
• CAR^»: 109.80% (Jun 2022) vs. 342.80% (Jun 2021) vs. 130.6% (Mar 2022, per the Q1 2022 post) - still falling every quarter as capital gets deployed into risk-weighted loans, though still nearly 11x OJK's 10% minimum.
• ROE^»: 0.76% (H1 2022) vs. -1.66% (H1 2021); ROA^»: 0.57% (H1 2022) vs. -1.30% (H1 2021). For comparison, the Sharia unit alone reported a standalone 14.15% ROA this half - see Beyond the Usual.
• Cost-to-Income^»: 69.19% (H1 2022) vs. 129.15% (H1 2021) vs. 74% (Mar 2022, per the Q1 2022 post) - continuing to improve.
• Cost of Funds (end of period, per presentation, not independently verifiable against this filing's own comparative period): 2.8% (H1 2022) vs. 3.1% (Mar 2022, per the Q1 2022 post) vs. 3.7% (H1 2021).
• Cost of Credit / Average Loan (per presentation): 5.3% (H1 2022) vs. 0.4% (H1 2021) vs. 4.2% (Mar 2022, per the Q1 2022 post) - rising in step with the NPL increase above.
• Related-party loan concentration: 3.02% of the conventional loan book (Jun 2022, Rp149.7 billion, one borrower) vs. 5.37% (Mar 2022, Rp200.0 billion, two borrowers) - see Beyond the Usual.
• PT GoTo Gojek Tokopedia's share of current-account deposits (per the filed related-party note): 87.77% (Rp1,451.6 billion, Jun 2022) vs. 85.24% (Dec 2021, per this filing's own comparative) vs. 57.5% (Mar 2022, per the Q1 2022 post) - a sharp reversal upward, the second-highest level in this entire backfill, behind only the 90.8% recorded in 1H2021 - see Beyond the Usual.
• Undrawn loan commitments: Rp333.0 billion (Jun 2022) vs. Rp446.6 billion (Dec 2021) vs. Rp685.2 billion (Mar 2022, per the Q1 2022 post) - reversed sharply after growing for two straight quarters - see Beyond the Usual.
• Headcount: 427 permanent employees at 30 June 2022, up from 371 at year-end and 414 at Mar 2022 - continuing steady hiring.
• Branch network: unchanged from March - one non-operational head office, three branches, two sub-branches, no cash office.
• Not available as a clean 30 June figure in the financial statements: the presentation's 3.3+ million KYC-verified customer count is "as of" the presentation date rather than the reporting date itself, consistent with every prior quarter in this backfill.

The Stock's Worst Quarter in This Backfill

Bank Jago's shares closed at approximately Rp9,150 on 30 June 2022, down 37.5% from Rp14,650 three months earlier - the sharpest single-quarter decline anywhere in this backfill, more than four times the size of Q1 2022's own 8.4% decline. No stock split has occurred at any point since the company's IPO, so Rp9,150 is the actual nominal price quoted on the IDX at the time, not a split-adjusted figure. The stock is now down 49.0% from its highest close in this backfill, Rp17,950 in July 2021, though still up roughly 6x from its price two years earlier.

Nothing in this quarter's own numbers explains a decline this size on its own - the operating trends above were mostly improving (cost-to-income fell, NIM stayed elevated, the bank posted its first profitable half). The more plausible driver is broader: Q2 2022 was a period of sharp, global de-rating in richly-valued growth and technology-adjacent stocks, as major central banks (including Bank Indonesia's own rate-tightening signals through the quarter) moved toward tighter monetary policy - an environment in which a bank still trading on an ecosystem narrative rather than proven core-banking earnings power was always going to be among the more exposed names on the exchange. That's a market-wide condition, not something specific to this filing, and it doesn't change the operational read above - but it's the more credible explanation than anything in this quarter's own results.

Beyond the Usual

The Sharia unit's dominance of the bank's profit widened again, still absent from the headline presentation

The company's own "1H 2022 Results Update" presentation shows a single "Maintain Positive Quarterly NPBT" chart, climbing from -Rp9 billion (Q2 2021) to Rp13 billion (Q2 2022), with no segment breakdown anywhere in the deck. Only Note 40 of the full interim financial statements discloses that the Sharia business unit alone earned Rp177.9 billion in net income this half, against Rp28.9 billion for the consolidated bank as a whole - meaning the conventional banking business lost approximately Rp148.9 billion over the same six months (see above). The Q1 2022 post flagged the same gap at roughly 5.7x; on a standalone-quarter basis the ratio has since widened to roughly 7.1x. This isn't non-compliant disclosure - the segment note is filed exactly as required - but a reader relying on the presentation alone, which is what most investors and journalists actually see, still has no way to know the "profitable half" headline rests almost entirely on a unit that didn't exist a year ago.

GoTo Gojek Tokopedia's funding concentration widened into two new deposit products this quarter

The Q1 2022 post reported PT GoTo Gojek Tokopedia's current-account share easing to 57.5% at March 2022, continuing the oscillation first flagged after 9M2021. That easing reversed sharply this quarter: GoTo's current-account share rose to 87.77% (Rp1,451.6 billion), the second-highest level in this entire backfill. More notably, GoTo appeared for the first time in two deposit products it had no balance in at year-end: a Rp110.0 billion time deposit (5.59% of all time deposits) and a Rp210.1 billion Sharia mudharabah deposit, the latter alone accounting for 81.24% of every mudharabah deposit the bank holds. A single related entity now anchors current accounts, a meaningful slice of time deposits, and the overwhelming majority of the bank's newest Sharia deposit product simultaneously - a funding base that looks diversified across products on the balance sheet, but isn't diversified across counterparties.

Gross NPL nearly doubled again, after two quarters of looking like it had stabilized

Gross NPL rose to 2.70% (net 1.41%) at 30 June 2022, up from 1.49%/0.39% three months earlier - continuing the pattern first flagged after 9M2021, when the bank's first-ever defaults appeared at 0.59%. That figure actually held roughly flat through year-end (0.58% at Dec 2021), which looked at the time like early-stage NPL settling down rather than compounding. It didn't: Q1 2022 saw it more than double to 1.49%, and this quarter it nearly doubled again to 2.70% - even as the loan book itself grew 34.4% in the same half, which normally dilutes an NPL ratio rather than doubling it. This is a young, fast-growing book, and some rise in NPL as origination ages is normal and expected - but two consecutive quarters of the rate of increase accelerating, after a quarter that looked like stabilization, is now a real trend worth underwriting against rather than dismissing as noise from a small base.

A previously flagged related-party loan was repaid again - while a different one grew, leaving net concentration lower

The Q1 2022 post reported two related-party loans outstanding at March 2022: Rp100.0 billion to PT Trimegah Sekuritas Indonesia Tbk (itself a repeat appearance, after being reported fully repaid once before) and Rp100.0 billion to PT GOFIN Karya Anak Bangsa. This quarter the Trimegah loan was repaid to zero again - its second disclosed cycle of appearing and being fully repaid in this backfill - while the GOFIN loan grew 49.7% to Rp149.7 billion. Because Trimegah's repayment outweighed GOFIN's growth, total related-party loan concentration actually fell, from 5.37% to 3.02% of the conventional book, even though the single largest related-party borrower is now larger than either loan was individually last quarter. A pattern this volatile - one counterparty appearing and fully disappearing twice inside seven quarters - says more about how loosely these relationships are managed than either individual balance does.

The deferred tax asset shrank again, but not because fiscal losses were used up this time - they grew

The Q1 2022 post reported the deferred tax asset shrinking from Rp77.5 billion to Rp72.1 billion as the bank's unutilized fiscal-loss pool got drawn down against Q1's taxable Sharia profit. Running the same note through H1 tells a different story: the aggregate deferred tax asset did keep shrinking, to Rp68.9 billion at 30 June, but the unutilized-fiscal-losses component of that asset actually grew, from Rp50.1 billion to Rp57.1 billion, as the conventional bank's continuing losses added to the pool faster than any quarter used it down. The overall DTA still fell only because unrelated temporary differences (mainly bonus/THR accrual payouts and fixed-asset depreciation timing) reversed by more than the loss pool grew. The upshot: the conventional bank's tax-loss carryforward, at Rp259.7 billion, is now larger than it was at year-end (Rp227.6 billion) - the opposite of what "the DTA is shrinking" would suggest on its own.

Undrawn loan commitments reversed course, shrinking even as the loan book grew 34%

The Q1 2022 post flagged undrawn loan facilities growing 53.4% in three months, faster than loans actually funded, as a forward indicator of coming credit growth. That reversed this quarter: undrawn commitments fell to Rp333.0 billion at 30 June, down 25.4% from Rp446.6 billion at year-end, even as loans and Sharia financing funded on the balance sheet grew 34.4% over the same period. Read together, the bank drew down more of its committed pipeline than it replaced with new commitments this half - either a genuine slowdown in new facility extension, or simply a normal pipeline-refill lag after Q1's spike. One quarter isn't enough to tell which, but it's worth checking against Q3.

The Sharia unit's return on assets dwarfs the conventional bank's by a wide margin

The Sharia business unit reported a standalone 14.15% return on assets for H1 2022, against the consolidated bank's 0.57% ROA over the same period - a roughly 25-fold difference. This is a distinct data point from the unit's absolute profit dominance discussed above: it isn't just that the Sharia unit is large relative to the bank's total earnings, it's that every rupiah of Sharia assets is earning at a rate the conventional business isn't close to matching, in only its first full year of operation.

Target Valuation Range

Market cap Rp126.78 trillion (~$8.50 billion), ~15.3x P/B, ~>2,100x P/E. Bottom line: the re-rating this quarter is directionally right, even if the trigger was probably more macro than company-specific. A bank whose own core lending franchise is still losing money never deserved a 20x+ book multiple, and Q2 2022's decline moved the stock meaningfully closer to pricing that reality - though it likely got there via a broad global de-rating of growth stocks as much as any Jago-specific reassessment.

Bank Jago's shares closed at approximately Rp9,150 on 30 June 2022, down 37.5% from Rp14,650 three months earlier - by far the largest quarterly decline in this backfill (see above). At 13,856,250,000 shares outstanding (unchanged since the March 2021 rights issue), that implies a market capitalization of approximately Rp126.78 trillion (~$8.50 billion).

Market cap → book value	Q2 2022
Share price (period-end)	Rp9,150
Shares outstanding	13,856,250,000
Market capitalization	Rp126.78 trillion (~$8.50 billion)
Total equity (book value)	Rp8,277,059M
Book value per share	Rp597.35

Peer-multiple sanity check	Q1 2022	Q2 2022	Change
P/B	24.6x	15.3x	down
P/E	>2,600x	>2,100x	down

P/B^»: ~15.3x, using book value^» per share of Rp597.35 (Rp8,277,059M total equity ÷ 13,856,250,000 shares) - down sharply from ~24.6x three months ago, and the lowest book multiple anywhere in this backfill, driven almost entirely by the falling share price rather than any change in book value, which barely moved this half. P/E^»: technically positive for a fourth straight period, but still economically meaningless at the implied multiple - annualizing this half's Rp2.09 EPS (×2) gives Rp4.18, for an implied P/E north of 2,100x. Stripping out the Sharia-vs-conventional split flagged above, the conventional bank's own half 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: four profitable periods out of ten since the "Becoming Jago" transformation began, with the two most recent concentrated overwhelmingly in a single business line under a year old, 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, and this quarter it moved in the right direction: ~15x book is still a premium multiple for a bank whose core lending business hasn't turned a profit, but it's a considerably smaller bet on the ecosystem story than three months ago.

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