A Comeback Quarter, Measured Against the Wrong Quarter
Bank Jago's own Q1 2023 investor presentation headlines "Back to Quarterly Profitability" - true, but only against the quarter it's actually comparing to: Q4 2022's Rp(32) billion loss, flagged in the FY2022 post as the bank's first loss-making quarter since Q2 2021. Q1 2023 posted net income of Rp17.5 billion - genuinely a swing back into the black quarter-over-quarter. But stack it against the same quarter a year earlier, and the "comeback" reads differently: net income actually fell 7.6% YoY, from Rp18.9 billion to Rp17.5 billion. Income before tax fell 8.0% (Rp24.4 billion to Rp22.5 billion). EPS fell 8.0% (Rp1.37 to Rp1.26). Net interest income grew a healthy 33.6% - but nearly all of that extra revenue went straight into a 123.0% jump in impairment provisions and a 25.8% rise in operating expenses, leaving less profit at the bottom than a year ago, not more. A reader relying on the deck's own framing - QoQ recovery, no YoY column shown for profit - would have no way to know the "return to profitability" is smaller than the profit it's supposedly returning to.
The reason traces straight back to the story this backfill has followed since Q1 2022. The Sharia business unit - the young division that earned 16.6x the whole bank's own net income for all of FY2022 - reported just Rp35.3 billion in net income this quarter, down 67.1% from the Rp107.3 billion it earned in Q1 2022. That collapse is why the Sharia-versus-consolidated ratio this backfill has tracked every quarter finally narrowed for real - from 5.67x a year ago to just 2.02x this quarter, the smallest gap recorded anywhere in this backfill. But it narrowed for the "wrong" reason: not because the conventional bank turned the corner, but because the unit carrying nearly all of the bank's profit lost two-thirds of its own income. Backing out the split - Sharia's Rp35.3 billion against the consolidated Rp17.5 billion - implies the conventional bank (the app, ecosystem lending, the legacy Artos back book) still lost approximately Rp17.8 billion this quarter, an improvement from Q1 2022's implied Rp88.4 billion conventional loss, but a much smaller improvement than the headline ratio makes it look. The Sharia unit's own financing book shrank too - down 15.8% quarter-over-quarter to Rp1.85 trillion, the first sequential decline for that book anywhere in this backfill - even as conventional loans grew 24.4% in the same three months. The engine that drove this whole story for a year just downshifted on both fronts at once.
The Prescription
Bank Jago should keep doing what's actually working operationally: cost-to-income fell from 93.3% a year ago to 67.1% this quarter, the sharpest efficiency improvement in this backfill, and net interest income grew 33.6% on a loan book up 76% YoY - the underlying banking machine is genuinely getting leaner even as headline profit shrank. What it needs to stop doing is letting its own investor presentation frame every quarter's profit story against whichever prior quarter makes the comparison look best - Q4 2022's loss this time, last year's deferred tax credit before that (see the FY2022 post). A bank whose most profitable division just lost two-thirds of its own income in a single year deserves a presentation that says so plainly, rather than one that leads with "back to profitability" against the one prior quarter that happened to lose money.
Key Financial Metrics
Q1 2023 vs. Q1 2022 - PT Bank Jago Tbk, consolidated
FX: IDR 15,020.0 = USD 1 (March 30, 2023 close, nearest trading day to period-end); comparative-period figures are shown in Rupiah only, consistent with prior posts in this backfill.
| Metric | Q1 2023 (IDR) | Q1 2023 (USD) | Q1 2022 (IDR) | YoY |
|---|---|---|---|---|
| Net interest and Sharia income ("Net Revenue" equivalent) | Rp422,726M | ~$28.14M | Rp316,314M | ✅ +33.6% |
| Other operating income (fee, provision, other) | Rp28,771M | ~$1.92M | Rp8,113M | ✅ +254.6%, fee income scaling off a small base |
| Provision for impairment losses | -Rp133,486M | -~$8.89M | -Rp59,872M | ⚠️ +123.0%, loan book growth plus rising credit cost |
| Other operating expenses (personnel, promotion, other) | -Rp303,058M | -~$20.18M | -Rp240,910M | ⚠️ +25.8% |
| Operating income | Rp14,953M | ~$1.00M | Rp23,645M | ⚠️ -36.8% - see above |
| Income before income tax | Rp22,453M | ~$1.49M | Rp24,398M | ⚠️ -8.0% |
| Deferred tax expense | -Rp4,949M | -~$0.33M | -Rp5,463M | An expense both quarters, unlike the FY2021-to-FY2022 tax-line swing |
| Net income for the period | Rp17,504M | ~$1.17M | Rp18,935M | ⚠️ -7.6% |
| Earnings per share (full amount, basic and diluted) | Rp1.26 | ~$0.0001 | Rp1.37 | ⚠️ -8.0% |
Operating income (above, the bank's own regulatory-format figure netting impairment losses against revenue) is the closest equivalent measure for a bank; Adjusted EBITDA and free cash flow aren't included, consistent with the rest of this backfill.
| Balance sheet metric | Mar 2023 (IDR) | Mar 2023 (USD) | Dec 2022 (IDR) | Change since FY2022 |
|---|---|---|---|---|
| Total Assets | Rp18,022,023M | ~$1,199.87M | Rp16,965,295M | ✅ +6.2% |
| Loans and Sharia financing (net) | Rp10,530,893M | ~$701.13M | Rp9,157,817M | ✅ +15.0% |
| Total Funding (current accounts, savings, time deposits) | Rp9,280,634M | ~$617.89M | Rp8,274,385M | ✅ +12.2% |
| Total Liabilities | Rp9,740,587M | ~$648.50M | Rp8,701,538M | ⚠️ +11.9% |
| Temporary Sharia (Syirkah) Funds | Rp548,269M | ~$36.50M | Rp526,059M | +4.2% |
| Total Equity | Rp8,281,436M | ~$551.36M | Rp8,263,757M | Essentially flat, +0.21% |
The number worth remembering isn't "back to profitability" - it's that net income, pre-tax income, and EPS all fell versus the same quarter a year ago, even as the loan book grew 76% YoY and cost-to-income improved to its best level in this backfill, because the Sharia unit that manufactured most of last year's profit lost two-thirds of its own income.
Key Operational Metrics
- CASA ratio»: 63.8% (Mar 2023, per the bank's own filed deposit figures) vs. 68.56% (Dec 2022, per the FY2022 post) - the first quarterly decline in this backfill's CASA ratio, as customers shifted into time deposits (up 29.1% quarter-over-quarter) faster than CASA balances grew (up 4.4%), consistent with the rising cost of funds below.
- Loan-to-Deposit Ratio»: 116.67% (Mar 2023, per the bank's own filed ratios) vs. 113.76% (Dec 2022, per the FY2022 post) vs. 145.68% (Mar 2022) - a second straight quarter ticking up after four quarters of decline.
- NIM» (per the bank's own filed ratios): 10.99% (Mar 2023) vs. 10.45% (FY 2022, per the FY2022 post) vs. 11.08% (Mar 2022) - essentially flat YoY, slightly ahead of FY2022's blended full-year average.
- NPL»: 1.51% gross / 0.33% net (Mar 2023, per the bank's own filed ratios) vs. 1.82%/0.55% (Dec 2022, per the FY2022 post) vs. 1.49%/0.39% (Mar 2022) - both ratios improved quarter-over-quarter and sit almost exactly where they were a year ago. This quarter's published financial statements don't break loan quality out by conventional-versus-Sharia book the way the annual report's notes did (see Beyond the Usual), so the split this backfill has tracked since 9M 2022 can't be recomputed this quarter.
- CAR»: 78.72% (Mar 2023, per the bank's own filed ratios) vs. 82.75% (Dec 2022, per the FY2022 post) vs. 130.60% (Mar 2022) - continuing to fall every quarter as capital gets deployed into risk-weighted loans, still nearly 8x OJK's 10% minimum.
- ROE» / ROA» (Mar 2023, per the bank's own filed ratios): 0.97% / 0.51%, versus 0.99% / 0.77% (Mar 2022) - both down slightly YoY, tracking the net income and asset-growth story above.
- Cost-to-Income» (per the bank's own filed ratios): 67.12% (Mar 2023) vs. 71.67% (FY 2022, per the FY2022 post) vs. 93.34% (Mar 2022) - the sharpest year-on-year efficiency improvement anywhere in this backfill.
- Cost of Funds (end of period, per the presentation): 3.2% (Mar 2023) vs. 2.8% (Dec 2022) vs. 3.1% (Mar 2022) - back above where the year started, as Bank Indonesia's rate-hiking cycle keeps reaching deposit pricing and the funding mix tilts toward time deposits.
- Related-party loan concentration: 4.19% of the conventional loan book (Mar 2023, Rp376,699M against Rp8,988,974M in Loans) vs. 5.53% (Dec 2022, per the FY2022 post) - a real decline, but see Beyond the Usual for why the specific borrower behind it can't be identified this quarter.
- Undrawn loan commitments: Rp1,043,857M (Mar 2023) vs. Rp1,578,886M (Dec 2022, per the FY2022 post) - down 33.9% quarter-over-quarter, the first decline after four straight quarters of growth, as loan disbursement outpaced new commitment facilities.
- KYC-verified digital banking and lending customers: "7.5 million," per the Q1 2023 investor presentation - not a clean 31 March balance-sheet-date figure, consistent with every prior quarter in this backfill.
- Headcount and branch network: not disclosed in this quarter's published financial statements or investor presentation, unlike the annual report - "not available" for Q1 2023.
The Stock Sets a New Backfill Low for a Fifth Straight Quarter
Bank Jago's shares closed at approximately Rp2,420 on 31 March 2023, down 34.9% from Rp3,720 three months earlier and down 83.5% from Rp14,650 a year ago. No stock split has occurred at any point since the company's IPO, so Rp2,420 is the actual nominal price quoted on the IDX at the time, not a split-adjusted figure. This extends Q4 2022's new low for a fifth consecutive quarter - the stock has now fallen every single quarter since Q1 2022, and Rp2,420 is down 86.5% from its all-time backfill high of Rp17,950 in July 2021.
The pattern this backfill has repeated every quarter since the decline began still holds: this quarter's own operational numbers - loan growth, a sharply improved cost-to-income ratio, NIM roughly flat YoY - are not obviously bad, and the profit decline documented above is real but modest (single-digit percentage points, not a collapse). A stock falling 83.5% in a year on a modest earnings decline is a valuation story, not an operating one - Bank Indonesia's tightening cycle and the broader 2022-23 de-rating of growth-stock multiples remain the more plausible explanation than anything specific to this quarter's results.
Beyond the Usual
This quarter's related-party loan decline can't be attributed to a specific borrower
The FY2022 post reported related-party loan concentration reaching a backfill-high 5.53% of the loan book at December 2022, driven by PT BFI Finance Indonesia Tbk's Rp299,259 million loan and PT Trimegah Sekuritas Indonesia Tbk's unchanged Rp100,000 million. By March 2023, total related-party loans (Rp376,699 million) have fallen to 4.19% of the conventional loan book - a real decline - but this quarter's published financial statements report only the aggregate figure, not a borrower-by-borrower breakdown the way the annual report's related-party note or 9M 2022's interim statements did. Whether this decline reflects BFI Finance's loan being repaid, Trimegah's, or some combination isn't verifiable from what's disclosed this quarter - a genuine reduction in disclosure granularity on a concentration this backfill has tracked closely since its first appearance in 1H2021.
The Sharia unit's loan book shrank for the first time in this backfill, in the same quarter its profit collapsed
Sharia financing outstanding fell 15.8% quarter-over-quarter, from Rp2,202,599 million at December 2022 to Rp1,853,955 million at March 2023 - the first sequential decline for that book anywhere in this backfill, arriving in the same quarter the unit's own net income fell 67.1% YoY (see above). Conventional loans moved in the opposite direction, growing 24.4% over the same three months (Rp7,225,388 million to Rp8,988,974 million) - the balance of the bank's own lending mix is shifting back toward the conventional book for the first time since the Sharia unit launched.
Undrawn loan commitments reversed course after four straight quarters of growth
The statement of commitments and contingencies shows unused loan/financing facilities falling to Rp1,043,857 million at March 2023, down 33.9% from Rp1,578,886 million three months earlier - the first quarterly decline in this line since the FY2021 post began tracking it. Loan disbursement outpacing new commitment facilities is a plausible explanation, consistent with the 24.4% quarter-over-quarter growth in conventional loans noted above, though the published statements don't break out how much of the change is drawdowns versus facilities simply not being renewed.
Target Valuation Range
Market cap Rp33.53 trillion (~$2.23 billion), ~4.0x P/B, ~480x P/E. Bottom line: still overvalued on a book-multiple basis, though the multiple keeps compressing toward something more defensible - the conventional bank still lost money this quarter on its own, and the Sharia unit that used to offset that loss just lost two-thirds of its own income too.
Bank Jago's shares closed at approximately Rp2,420 on 31 March 2023, down 34.9% from Rp3,720 three months earlier (see above). At 13,856,250,000 shares outstanding (unchanged since the March 2021 rights issue), that implies a market capitalization of approximately Rp33.53 trillion (~$2.23 billion).
| Market cap → book value | Q1 2023 |
|---|---|
| Share price (period-end) | Rp2,420 |
| Shares outstanding | 13,856,250,000 |
| Market capitalization | Rp33.53 trillion (~$2.23 billion) |
| Total equity (book value) | Rp8,281,436M |
| Book value per share | Rp597.66 |
| Peer-multiple sanity check | Q4 2022 | Q1 2023 | Change |
|---|---|---|---|
| P/B | 6.2x | 4.0x | down |
| P/E | 3,235x | 480x | down |
P/B»: ~4.0x, using book value» per share of Rp597.66 (Rp8,281,436M total equity ÷ 13,856,250,000 shares) - down from ~6.2x three months ago, the lowest book multiple anywhere in this backfill, again driven almost entirely by the falling share price rather than book value, which grew only 0.21% for the quarter. P/E»: annualizing Q1 2023 EPS of Rp1.26 (×4) gives Rp5.04, for an implied multiple of roughly 480x - still too thin an earnings base to support a real earnings multiple, though a fraction of 9M 2022's implied 1,600x+ as the price has fallen faster than the earnings base has stayed thin. A full DCF still isn't appropriate, for the same reason every prior post in this backfill has given: most standalone quarters since the "Becoming Jago" transformation began have now been profitable, but the business generating nearly all of that profit just had its own worst year-on-year profit decline in this backfill's history. The peer-multiple read stays the honest one, and it keeps moving toward a more defensible level - ~4.0x book is the cheapest this backfill has recorded, but it's still a premium for a bank whose conventional lending business lost money again this quarter on its own.
PT Bank Jago Tbk's published financial statements for the three-month period ended 31 March 2023 (with 31 March 2022 and 31 December 2022 comparatives), and the company's "1Q 2023 Results" investor presentation, dated April 2023.