The Coverage Ratio Kept Climbing - And This Time It's Not an Accounting Story
The FY2020 post closed on a genuine caveat: BRI's bank-only NPL Coverage Ratio had rocketed to a series-high 247.98%, but roughly Rp12.1 trillion of that year's Rp26.8 trillion allowance build was a one-time SFAS 71/IFRS-9 transition adjustment booked to opening retained earnings on January 1, 2020 - not new 2020 caution. That accounting effect is now a full year in the past, applying equally to both sides of any year-over-year comparison this quarter makes. And the coverage ratio kept climbing anyway: to 254.79% at March 31, 2021, up from FY2020's 247.98% and comfortably clear of Q1 2020's own pre-pandemic-provisioning read of 223.56%. Whatever this number was measuring before, it's now unambiguously a genuine, ongoing provisioning decision rather than a base-effect artifact - BRI is still building loss-absorption capacity a full year after Covid-19 first hit Indonesia, not just resetting a one-time accounting dial.
That caution shows up directly in the quarter's own numbers. Bank-only Credit Cost - provision expense relative to average loans - rose to 3.91% from Q1 2020's 2.94% and FY2020's already-elevated 3.28%, the highest reading in this entire series. The consolidated impairment-for-financial-assets line jumped to Rp8,462,730 million for the quarter, up 29.2% from Rp6,549,451 million a year earlier. That heavier provisioning, not a revenue problem, is what drove this quarter's profit decline: consolidated net interest, Sharia and premium income actually grew 9.87% YoY (Rp23,650,685M vs Rp21,526,092M), while consolidated net income attributable to owners fell 16.38% YoY (Rp6,826,171M vs Rp8,162,840M). A bank whose core lending income is genuinely recovering but whose bottom line keeps shrinking is a bank still pricing in credit losses the top-line numbers haven't shown up in yet.
The genuinely new piece of good news sits in the segment table BRI's own presentation has tracked as its weakest spot for two straight years. Corporate segment NPL eased to 11.31% at Q1 2021, down from FY2020's series-worst 12.58% - the first quarter-over-quarter improvement since Q3 2019's brief reprieve, and the first sign in this entire five-quarter deterioration (9.14% at Q1 2020, 10.75% at Q2, 10.85% at Q3, 12.58% at FY2020) that the segment might be stabilizing rather than simply shrinking its way to a smaller problem. It's still worse than Q1 2020's 9.14% on a like-for-like YoY basis - genuine recovery against the pandemic's onset hasn't fully arrived yet - but the direction reversed for the first time. More notably, Corporate's own loan book actually grew 4.0% quarter-over-quarter (Rp74.7 trillion to Rp77.7 trillion), the first growth since the -23.3% YoY contraction the FY2020 post tracked - even as the segment's NPL improved in the same quarter. That combination (loans growing and credit quality improving together) is the first time this series has seen Corporate move in the right direction on both dimensions at once. See Beyond the Usual for what's still keeping this from being a clean recovery story.
The Prescription
BRI should keep publishing the exact split it now has the data to publish: how much of a coverage-ratio move in a given quarter is genuinely new provisioning versus a base effect, methodology change, or write-off cleanup. The FY2020 post's Prescription asked for one sentence disclosing the SFAS 71 transition split; that sentence still hasn't appeared in the investor presentation, but this quarter's own numbers do the work for a reader willing to do the year-over-year arithmetic - the coverage ratio's continued rise, unaided by any transition effect, is itself the clearest evidence yet that management's caution is real rather than accounting-driven. BRI should say so explicitly rather than let a reader have to reconstruct it, especially now that the number finally supports the story management wants to tell.
What BRI should stop doing: describing Covid-19 restructuring in language that implies a one-way decline. The FY2020 post's own headline finding was that restructuring fell for the first time, from Rp193.7 trillion to Rp186.6 trillion, "below management's own ~Rp200 trillion ceiling." That framing didn't survive one quarter - restructured loans grew back to Rp190.6 trillion (21.3% of loans) at Q1 2021, per BRI's own presentation. It's a small move, not a reversal of the broader trend, but it's evidence that the pool is oscillating around a plateau rather than steadily working itself down, and a presentation that only celebrates declines without flagging upticks in the same series is telling half the story. BRI's own new disclosure this quarter - only 13% of restructured borrowers have actually exited the scheme so far (see Beyond the Usual) - is a far more honest way to frame where this pool actually stands: still overwhelmingly unresolved, fourteen months into the pandemic.
Key Financial Metrics
Q1 2021 vs. Q1 2020 (consolidated), one year after Indonesia's first Covid-19 quarter
FX: 1 USD = Rp14,525.00 as of March 31, 2021, per BRI's own filing (vs Rp14,050.00 at December 31, 2020 and Rp16,310.00 at March 31, 2020 - the same filing's own comparative disclosure) - unlike Q3 2020's filing, this quarter's disclosed rate moves sensibly against both comparison dates.
| Metric | Q1 2021 (IDR) | Q1 2021 (USD) | Q1 2020 (IDR) | YoY |
|---|---|---|---|---|
| Net Interest, Sharia and Premium Income, net ("Net Revenue" equivalent) | Rp23,650,685M | ~$1,628M | Rp21,526,092M | ✅ +9.87% |
| Operating Income (Profit from Operations) | Rp8,973,068M | ~$618M | Rp10,143,005M | ⚠️ -11.53% |
| Net Income (attributable to owners) | Rp6,826,171M | ~$470M | Rp8,162,840M | ⚠️ -16.38% |
| Total Comprehensive Income (attributable to owners) | Rp4,635,593M | ~$319M | Rp5,003,669M | ⚠️ -7.36% |
| EPS (basic, attributable to owners) | Rp56.00 | ~$0.0039 | Rp67.00 | ⚠️ -16.42% |
| Balance sheet metric | Mar 2021 (IDR) | Mar 2021 (USD) | Dec 2020 (IDR) | QoQ | Mar 2020 (IDR) | YoY |
|---|---|---|---|---|---|---|
| Total Assets | Rp1,411,052B | ~$97,148M | Rp1,511,805B | ⚠️ -6.66% | Rp1,358,979B | ✅ +3.83% |
| Loans (gross, incl. sharia financing and finance lease) | Rp914,189B | ~$62,933M | Rp938,374B | ⚠️ -2.58% | Rp930,726B | ⚠️ -1.77% |
| Total Deposits | Rp1,049,315B | ~$72,239M | Rp1,121,102B | ⚠️ -6.40% | Rp1,028,996B | ✅ +2.00% |
| Total Equity (incl. non-controlling interest) | Rp194,764B | ~$13,410M | Rp199,911B | ⚠️ -2.57% | Rp179,639B | ✅ +8.42% |
| Total Cash and Cash Equivalents (per cash flow statement, period-end) | Rp145,923B | ~$10,046M | Rp167,253B | ⚠️ -12.75% | Rp158,652B | ⚠️ -8.02% |
Net income fell 16.4% YoY on the back of a 29.2% jump in impairment expense - not a revenue problem. Net revenue actually grew 9.9% over the same twelve months, the clearest sign yet that BRI's underlying lending business is genuinely recovering from Covid-19's Q1 2020 onset, even while the bank keeps building loss-absorption capacity ahead of losses that haven't fully materialized. See above.
Loans and deposits both contracted quarter-over-quarter (typical for BRI's own reporting cadence, where Q4 year-end pushes tend to unwind somewhat into Q1), but the more meaningful comparison is year-over-year: loans essentially flat (-1.8%), deposits up 2.0%, and total assets up 3.8% - a genuinely stronger balance sheet than the one BRI carried into the pandemic a year earlier, even with the segment-level Corporate stress still working through the book.
Key Operational Metrics
Bank-only, per BRI's own investor presentation and filed financial-ratio table, unless stated
- CASA»: 59.48% (Mar 2021) vs 61.00% (FY2020) and 56.86% (Mar 2020) ✅ - down slightly from year-end but still well above a year ago, extending the multi-year reversal tracked since FY2019.
- Loan-to-Deposit Ratio (LDR)»: 86.77% (Mar 2021) vs 83.66% (FY2020) and 90.39% (Mar 2020) - up from year-end as deposits fell faster than loans this quarter, but still comfortably below a year ago.
- Net Interest Margin (NIM)»: 7.00% (Mar 2021) vs 6.00% (FY2020) and 6.66% (Mar 2020) ✅ - a genuine improvement on both counts, the strongest NIM reading in this entire series and a direct sign of the funding-cost benefit from CASA's multi-year climb (Cost of Fund fell to 2.26% from 3.65% a year ago).
- ROA» (before tax): 2.65% (Mar 2021) vs 1.98% (FY2020) ✅ but vs 3.19% (Mar 2020) ⚠️ - up from year-end, still down YoY on the heavier provisioning described above.
- ROE» (Tier 1): 15.47% (Mar 2021) vs 11.05% (FY2020) ✅ but vs 20.39% (Mar 2020) ⚠️ - same pattern as ROA.
- CAR» (Total, bank-only): 19.40% (Mar 2021) vs 20.61% (FY2020) and 18.23% (Mar 2020) ✅ - down slightly from year-end but a real improvement over a year ago, when Tier 1 capital dropped 432bp in a single quarter on a dividend payout and bond mark-to-market loss. Tier 1 CAR: 18.73% (Mar 2021) vs 19.59% (FY2020) and 17.45% (Mar 2020).
- NPL ratio - gross (bank-only): 3.12% (Mar 2021) vs 2.94% (FY2020) and 2.81% (Mar 2020) ⚠️ - worse on both counts, a genuine deterioration even as coverage keeps building. NPL ratio - net: 0.86% (Mar 2021) vs 0.80% (FY2020) and 0.63% (Mar 2020) - also worse on both counts, unlike prior quarters where the net ratio improved purely from a larger allowance base.
- NPL Coverage Ratio (bank-only): 254.79% (Mar 2021) vs 247.98% (FY2020) and 223.56% (Mar 2020) ✅ - a fresh series-high, and see above for why this move, unlike FY2020's, isn't explainable by an accounting transition.
- Loan at Risk (LAR)» (bank-only, incl. Covid-19 restructuring): 28.84% of total loans (Mar 2021) vs 28.26% (FY2020) and 12.93% (Mar 2020) - essentially flat against year-end, still more than double a year ago (base effect: Covid-19 restructuring hadn't yet built up by Mar 2020). LAR Coverage: 27.58% (Mar 2021) vs 25.77% (FY2020) and 48.66% (Mar 2020).
- Credit Cost (bank-only): 3.91% (Mar 2021) vs 3.28% (FY2020) and 2.94% (Mar 2020) ⚠️ - the highest reading in this series, confirming the heavier provisioning driving this quarter's profit decline.
- BOPO» (Opex/Opr. Income, bank-only): 76.83% (Mar 2021) vs 81.22% (FY2020) ✅ but 72.97% (Mar 2020) ⚠️ - improved from year-end but still worse YoY.
- Loan-mix NPL by category (bank-only): Micro 1.23%, Consumer 1.65%, Small 4.10%, Medium 4.46%, Corporate 11.31%, SoE 1.25%, Total 3.12% (Mar 2021) vs Micro 1.45%, Consumer 1.43%, Small 3.74%, Medium 4.37%, Corporate 9.14%, SoE 0.55%, Total 2.81% (Mar 2020). Corporate remains BRI's clear outlier by a wide margin, but is the only large segment to have improved sequentially from FY2020 - see above.
- Restructured loans, Covid-19 (bank-only): Rp190.6 trillion (21.3% of total loans) at Mar 31, 2021, up slightly from Rp186.6 trillion (21.2%) at Dec 31, 2020 - breaking the first-ever decline the FY2020 post recorded after just one quarter, though still well below the peak Rp193.7 trillion of September 2020.
Business Lines: Loan Growth and Credit Quality
Q1 2021 vs. Q1 2020, bank-only, per BRI's own investor presentation
Micro loans grew 12.4% YoY (to Rp360.0 trillion from Rp320.2 trillion), again the fastest-growing large segment and now 40.2% of the total loan book - continuing the acceleration flagged through FY2020, still driven by KUR disbursement. NPL worsened slightly to 1.23% from 1.45% a year ago - actually an improvement YoY, despite Micro's continued rapid growth, though it's up from FY2020's 0.83%.
Consumer grew 1.7% YoY (to Rp145.1 trillion), a further deceleration from FY2020's already-modest 2.3%. NPL worsened to 1.65% from 1.43% a year ago, extending the gradual retail-book deterioration tracked since Q1 2020.
Small Commercial loans shrank 2.2% YoY (to Rp193.3 trillion), reversing FY2020's near-flat reading, with NPL worsening to 4.10% from 3.74%. Medium loans also contracted, -2.5% YoY (to Rp19.9 trillion), continuing the multi-year shrinkage, though NPL improved slightly to 4.46% from 4.37% - roughly stable, unlike Corporate's much larger swing.
Corporate loans grew 4.0% QoQ from FY2020's low (Rp74.7 trillion to Rp77.7 trillion) but still contracted -23.0% YoY (from Rp100.9 trillion a year ago) - the sharp pullback the FY2020 post tracked hasn't reversed on a YoY basis, but the sequential direction changed for the first time. NPL eased to 11.31% from FY2020's 12.58% (see above) - still far worse than Q1 2020's 9.14%, but the first quarter this segment has improved on both loan growth and credit quality at the same time. SoE loans contracted 1.8% YoY (to Rp100.5 trillion from Rp102.4 trillion), a mild reversal of FY2020's near-flat reading, with NPL worsening to 1.25% from 0.55% - still by a wide margin the cleanest large segment, but no longer moving in the opposite direction from Corporate the way it did all of FY2020.
Segment Comparison
Of the six loan-mix categories, only Corporate improved on both growth and credit quality simultaneously versus FY2020 - a reversal of the FY2020 post's finding, where Corporate and Consumer were the two segments moving the wrong direction on both counts. Every other segment either held roughly flat or continued a modest deterioration. This is a genuinely different shape of quarter than any of the four Covid-19-era quarters this series has covered: instead of one segment (Micro) carrying growth while another (Corporate) dragged asset quality, the segment that dragged asset quality longest is the one showing the first sign of a turn - even as Micro's own growth engine kept running at essentially the same pace.
Beyond the Usual
This quarter's source document is again the bare OJK transparency-format quarterly report (statements only, no notes to the financial statements) - the same format that has applied to every quarter since Q1 2020, with FY2020's full audited annual statements the lone exception in this stretch. The findings below come from BRI's own investor presentation rather than footnotes.
The Sharia Subsidiary's Merger Closed Exactly as Disclosed, and BRI's Final Stake Is Now Confirmed
The FY2020 post flagged that BRI's sharia subsidiary was set to merge into a new entity, Bank Syariah Indonesia, effective February 1, 2021, with BRI projected to hold approximately 17.4% of the combined bank rather than a controlling stake. This quarter's presentation confirms the merger closed and lists BRI's resulting stake at a final 17.29% - listed explicitly under "Associated Entities - Ownership <50%," not among the majority-owned subsidiaries BRI consolidates. The practical effect is the one the FY2020 post already anticipated: a business BRI fully consolidated as of December 2020 no longer contributes to BRI's own consolidated revenue or loan book from February 2021 onward, appearing instead as a minority equity-method investment. Any reader comparing BRI's post-merger loan or asset totals against pre-2021 quarters should account for this structural change, not just organic growth or contraction.
Only 13% of Restructured Borrowers Have Actually Exited the Covid-19 Scheme So Far
BRI's presentation this quarter discloses, for the first time in this series, a breakdown of what's actually happened to borrowers who entered Covid-19 restructuring: only 13% have achieved what the presentation labels "Success" (paid off, renewed, or lifted from the restructured scheme entirely), a further 5% have made principal payments, 0.34% have been written off, and the remaining 82% are still sitting inside the restructured scheme unchanged. Restructured loans by collectability stage break down as 92.90% Stage 1, 4.80% Stage 2, and 2.30% Stage 3 - meaning the overwhelming majority of this Rp190.6 trillion pool is still classified as low-risk under the accounting stage system, even though only a small fraction of borrowers have demonstrated an actual ability to resume normal payment terms. This is a genuinely useful new number: it puts a concrete figure on how much of the restructured book's apparent stability [flagged since Q2 2020](/analysis/bbri/2020-06/#key-operational-metrics) is real credit recovery versus simply loans that haven't yet been tested by the end of forbearance.
Write-off recovery improved sharply this quarter: gross write-offs fell to Rp1.7 trillion (bank-only) from Rp4.0 trillion a year ago, while recovery income of written-off loans came in at Rp1.8 trillion - a recovery-to-write-off ratio of 103.6%, meaning BRI recovered more from previously written-off loans than it wrote off fresh in the same quarter, a first for this series (Q1 2020's ratio was 40.6%, and every full-year reading since 2016 has sat between 41% and 53%).
The composition of BRI's restructured-loan pool shifted meaningfully by segment: Corporate's share of total restructured loans nearly halved, from 16.3% of the pool at Q1 2020 to 8.9% at Q1 2021, while Micro's share grew from 24.3% to 36.3% - consistent with Corporate's own loan book shrinking sharply over the same period and Micro's continuing to expand, rather than any change in how aggressively either segment is being restructured.
Target Valuation Range
~17.9x P/E, ~2.57x P/B. Bottom line: the stock's re-rating has partly caught up with a genuinely stronger balance sheet, but Q1's own earnings dip and the still-unresolved Corporate/restructuring picture mean this remains a peer-multiple read, not a full valuation call.
BRI's stock closed at approximately Rp3,999.93 on March 31, 2021, per publicly available exchange price data - up 5.5% from the FY2020 post's Rp3,790.84 close, and up a much sharper 45.7% year-over-year from Q1 2020's Rp2,745.41 close, the quarter Indonesia's Covid-19 crash first hit the stock. Over the trailing two years the price ranged as high as roughly Rp4,281.74 (February 2021, a new high in this window) and as low as roughly Rp2,481.78 (April 2020) - a 42.0% peak-to-trough move, large enough to note on its own, entirely explained by the same Covid-19 crash-and-recovery arc this series has tracked since Q1 2020, not by anything specific to this quarter's own numbers.
Annualized Q1 2021 EPS (Rp56 × 4 = Rp224) gives a P/E» of approximately 17.9x against the Rp3,999.93 close - down from FY2020's ~24.9x, which used a full-year (not annualized) EPS base, so part of the apparent compression reflects that methodology switch rather than a genuine re-rating; against Q1 2020's own ~11.3x annualized reading, the multiple is meaningfully richer on a like-for-like basis, consistent with the stock's 45.7% YoY gain outrunning its 16.4% YoY decline in annualized earnings power.
Book value per share is approximately Rp1,554 (Rp191,623,540 million total equity attributable to owners ÷ ~123,346 million shares outstanding).
| Market cap → book value | Q1 2021 |
|---|---|
| Share price (period-end) | Rp3,999.93 |
| Shares outstanding | ~123,346 million |
| Market capitalization | ~Rp493,375B (~$33.97B, using this quarter's disclosed Rp14,525.00/USD rate) |
| Total equity attributable to owners (book value) | Rp191,624B |
| P/B» | ~2.57x |
| Peer-multiple sanity check | FY2020 | Q1 2021 | Change |
|---|---|---|---|
| P/E» | ~24.9x (full-year) | ~17.9x (annualized) | ✅ down - part methodology switch, part real |
| P/B» | ~2.37x | ~2.57x | ⚠️ up - tracking the stock's own appreciation more than book value, which grew only modestly |
The same-period peer read is available directly: BBCA's own Q1 2021 post reported an annualized P/E of ~27.2x - a gap of roughly 9.3x versus BRI's ~17.9x, wider than FY2020's ~0.1x near-parity. BCA's net income grew 7.0% YoY this same quarter while BRI's fell 16.4% - the market pricing BCA's cleaner, more consistent recovery at a real premium over BRI's heavier-provisioning, still-recovering Corporate book.
A full DCF still isn't included here, for the same reason every prior post in this series has given: Corporate's NPL just posted its first improvement in five quarters but remains this series' single worst credit-quality reading by a wide margin, only 13% of Covid-19-restructured borrowers have demonstrably exited that scheme (see Beyond the Usual), and the sharia subsidiary's departure from BRI's consolidated group is now a real structural change rather than a pending one. None of that is a stable base yet for multi-year credit-quality assumptions. The peer-multiple read above remains the honest valuation lens this quarter.
PT Bank Rakyat Indonesia (Persero) Tbk's published consolidated interim financial statements (OJK transparency format, audited) as of March 31, 2021 and for the three-month period then ended, together with its Q1 2021 investor presentation.