Profit Rebounded Through Delta - Credit Cost Didn't Get the Memo
Q2 2021's post closed on the observation that Indonesia's Delta-variant wave and the PPKM Darurat (Emergency Public Activities Restrictions) that came with it began on July 3, 2021 - three days after that quarter closed - so none of the damage was in the numbers yet. This is that quarter: the July-September reporting period sits entirely inside PPKM Darurat and its successor restrictions, which stayed largely in force until late in September. A reader bracing for the sequential profit decline to deepen a third quarter running will instead find the opposite: standalone Q3 2021 consolidated net income attributable to owners - derived by subtracting H1 2021's own reported figure from this filing's nine-month total - comes to roughly Rp6,783,623 million, up ~20.1% from Q2's roughly Rp5,646,456 million. That's the first sequential increase since Q4 2020, breaking the two-quarter decline streak this series has tracked since Q1 2021. Bank-only standalone net income tells the same story even more sharply, rising ~38.0% QoQ to roughly Rp7,967 billion from Q2's roughly Rp5,775 billion, per BRI's own presentation.
Credit Cost - the metric that drove all of last quarter's caution, rising for four straight quarters to a series-high 4.12% - also turned the corner this quarter, easing to 3.79% for the nine months ended September 30, 2021. That's a genuine improvement, the first decline in this metric since Q1 2021, and it happened in the same quarter Indonesia's restrictions were at their tightest. But 3.79% still sits above the 3.5%-3.7% ceiling that management itself raised the FY2021 Credit Cost guidance to just one quarter ago (see Q2's Beyond the Usual) - a guidance range published specifically to get ahead of exactly this kind of deterioration, breached anyway within a single quarter of being set. Gross NPL, by contrast, actually landed inside its own raised guidance range (3.29% against a 3.3%-3.5% target) - so this isn't a broad guidance miss, just a specific one on the metric that has driven every quarter's earnings story since provisioning discipline tightened in 2020.
None of this - not the profit rebound, not the Credit Cost improvement, not the guidance breach - is actually the biggest thing that happened to BRI this quarter. On September 13, 2021, BRI completed the formation of The Ultra Micro Holding Company (UMi Holding), bringing state-owned pawnshop lender Pegadaian and micro-finance company PNM into the group. The mechanism was a Rp95.92 trillion rights issue - 101.53% oversubscribed - of which Rp41.15 trillion came in cash from public shareholders (funding BRI's own capital) and Rp54.77 trillion came from the Indonesian government transferring its 99.99% stakes in Pegadaian and PNM to BRI in kind. BRI issued roughly 28.2 billion new shares to complete the deal, on top of the roughly 123.3 billion already outstanding. See Beyond the Usual for what that means for this quarter's capital ratios.
The Prescription
BRI should publish CAR and ROE on two bases for the next several quarters, not one: as-reported (including the Rp41.15 trillion cash injection and Pegadaian/PNM's now-consolidated balance sheet) and an explicit "organic" or "pre-UMi Holding" comparison, the way it already separates individual (bank-only) from consolidated figures every quarter. A CAR that jumps from 19.63% to 24.37% in a single quarter for capital-structure reasons, sitting in the same table as ratios that are otherwise meant to signal earnings-driven strength, is genuinely confusing without that split - and BRI is about to spend several quarters integrating two new subsidiaries whose earnings will show up gradually, making the "how much of this quarter's ratio move is real" question recur, not a one-off.
What BRI should stop doing: publishing a numeric FY guidance range specifically to signal that management is getting ahead of deteriorating credit conditions - as it did with Credit Cost last quarter - and then breaching that same range the very next quarter with no acknowledgment in the presentation at all. The entire value of a raised guidance range is that it's a credible, falsifiable commitment; missing it silently, one quarter after making it, undercuts exactly the transparency the raise was supposed to demonstrate. A single sentence noting the miss and why would cost nothing and preserve the credibility of every future guidance revision.
Key Financial Metrics
Nine months ended September 30, 2021 vs. September 30, 2020 (consolidated), unless noted
FX: 1 USD = Rp14,312.50 as of September 30, 2021, per BRI's own filing (vs Rp14,050.00 at December 31, 2020 and Rp14,880.00 at September 30, 2020 - the same filing's own comparative disclosure).
| Metric | 9M 2021 (IDR) | 9M 2021 (USD) | 9M 2020 (IDR) | YoY |
|---|---|---|---|---|
| Net Interest, Sharia and Premium Income, net ("Net Revenue" equivalent) | Rp72,432,002M | ~$5,061M | Rp57,088,326M | ✅ +26.87% |
| Operating Income (Profit from Operations) | Rp25,364,930M | ~$1,772M | Rp20,435,973M | ✅ +24.13% |
| Net Income (attributable to owners) | Rp19,256,250M | ~$1,345M | Rp14,116,093M | ✅ +36.41% (and ✅ +20.1% Q3-standalone QoQ - the first sequential rise in three quarters, see above) |
| Total Comprehensive Income (attributable to owners) | Rp16,955,026M | ~$1,185M | Rp16,880,533M | flat, +0.44% |
| EPS (basic, attributable to owners) | Rp154 | ~$0.0108 | Rp115 | ✅ +33.91% |
| Balance sheet metric | Sep 2021 (IDR) | Sep 2021 (USD) | Jun 2021 (IDR) | QoQ | Sep 2020 (IDR) | YoY |
|---|---|---|---|---|---|---|
| Total Assets | Rp1,619,772B | ~$113,172M | Rp1,450,907B | ✅ +11.64% | Rp1,447,848B | ✅ +11.87% |
| Loans (gross, incl. sharia financing and finance lease) | Rp1,026,424B | ~$71,715M | Rp929,402B | ✅ +10.44% | Rp935,347B | ✅ +9.74% |
| Total Deposits | Rp1,135,305B | ~$79,323M | Rp1,096,445B | ✅ +3.55% | Rp1,131,928B | ⚠️ +0.30% (essentially flat) |
| Total Equity (incl. non-controlling interest) | Rp280,283B | ~$19,583M | Rp200,203B | ✅ +40.00% (the Ultra Micro Holding rights issue, not retained earnings - see Beyond the Usual) | Rp194,668B | ✅ +43.97% |
| Total Cash and Cash Equivalents (per cash flow statement, period-end) | Rp162,560B | ~$11,357M | Rp165,507B | ⚠️ -1.78% | Rp135,457B | ✅ +20.02% |
The equity line's 40% QoQ jump is the rights issue closing, not a sudden burst of profitability - see Beyond the Usual for why that matters to how the rest of this quarter's ratios should be read. Every other balance-sheet line grew on both a QoQ and YoY basis, extending the pattern Q2 2021 first showed, with total deposits the one line growing only marginally YoY as time deposits actually shrank.
Key Operational Metrics
Bank-only, per BRI's own investor presentation and filed financial-ratio table, unless stated
- CASA»: 60.05% (Sep 2021) vs 60.10% (Jun 2021) and 60.15% (Sep 2020) ⚠️ - the first dip on both counts in this series' multi-year CASA climb, though still essentially flat around the same ~60% band held since FY2020.
- Loan-to-Deposit Ratio (LDR)»: 83.05% (Sep 2021) vs 84.52% (Jun 2021) and 82.58% (Sep 2020) - down QoQ as deposits kept growing faster than loans, up marginally YoY.
- Net Interest Margin (NIM)»: 6.86% (Sep 2021) vs 7.02% (Jun 2021) and 5.76% (Sep 2020) - down slightly from Q2's series-high reading, but still comfortably ahead of management's own raised FY2021 guidance of "±6.7%."
- ROA» (before tax): 2.52% (Sep 2021) vs 2.38% (Jun 2021) ✅ and 2.07% (Sep 2020) ✅ - improved on both counts, reversing Q2's sequential dip.
- ROE» (Tier 1): 15.28% (Sep 2021) vs 14.53% (Jun 2021) ✅ and 11.43% (Sep 2020) ✅ - also improved on both counts.
- CAR» (Total, bank-only): 24.37% (Sep 2021) vs 19.63% (Jun 2021) and 20.38% (Sep 2020) ✅ - a fresh series-high, but almost entirely the rights issue's cash proceeds landing in the capital base, not earnings-driven strength (see Beyond the Usual). Tier 1 CAR: 23.36% (Sep 2021) vs 18.62% (Jun 2021) and 19.37% (Sep 2020).
- NPL ratio - gross (bank-only): 3.29% (Sep 2021) vs 3.27% (Jun 2021) and 3.02% (Sep 2020) ⚠️ - marginally worse on both counts, though inside management's own raised guidance range of 3.3%-3.5% (3.29% rounds just under it). NPL ratio - net: 0.86% (Sep 2021) vs 0.93% (Jun 2021) ✅ but 0.78% (Sep 2020) ⚠️ - improved QoQ, still worse YoY.
- NPL Coverage Ratio (bank-only): 259.70% (Sep 2021) vs 258.41% (Jun 2021) and 215.01% (Sep 2020) ✅ - another fresh series-high, extending the climb flagged since Q1 2021.
- Loan at Risk (LAR)» (bank-only, incl. Covid-19 restructuring): 25.62% of total loans (Sep 2021) vs 27.29% (Jun 2021) and 29.77% (Sep 2020) ✅ - the third straight quarterly improvement on both counts. LAR Coverage: 33.35% (Sep 2021) vs 30.96% (Jun 2021) and 21.84% (Sep 2020) ✅.
- Credit Cost (bank-only): 3.79% (Sep 2021) vs 4.12% (Jun 2021) ✅ but 2.50% (Sep 2020) ⚠️ - the first quarterly improvement since Q1 2021, yet still above the 3.5%-3.7% FY2021 guidance ceiling management raised last quarter (see above).
- BOPO» (Opex/Opr. Income, bank-only): 76.37% (Sep 2021) vs 78.30% (Jun 2021) ✅ and 80.64% (Sep 2020) ✅ - improved on both counts.
- Loan-mix NPL by category (bank-only, per this quarter's own trend table): Micro 1.62%, Consumer 1.87%, Small 4.27%, Medium 3.40%, Corporate 10.89%, SoE 1.75%, Total 3.29% (Sep 2021) vs Micro 1.53%, Consumer 1.79%, Small 4.14%, Medium 2.99%, Corporate 11.25%, SoE 1.96%, Total 3.27% (Jun 2021). Note: this quarter's own presentation reports the June 2021 Corporate figure as 11.25%, not the 11.81% Q2's post cited from that quarter's own materials - see Beyond the Usual for that discrepancy. Using this quarter's own internally consistent series, Corporate and SoE both kept easing for a second straight quarter, while Medium reversed its multi-quarter improvement streak, worsening to 3.40% from 2.99%.
- Restructured loans, Covid-19 (bank-only): Rp166.2 trillion (17.8% of total loans) at Sep 30, 2021, down from Rp175.2 trillion (19.2%) at Jun 30, 2021 - the decline continuing for a second straight quarter. See Beyond the Usual for the exit-rate data behind that shrinkage.
Business Lines: Loan Growth and Credit Quality
9M 2021 vs. 9M 2020, bank-only, per BRI's own investor presentation
Micro loans grew 15.5% YoY (+Rp50.9 trillion), again the fastest-growing large segment, reaching 40.8% of total loan composition (up from 37.5% a year earlier) and pushing MSME's combined share of the book to 80.5% from 79.2%. NPL kept worsening to 1.62% from 1.53% at Q2 and 0.83% at FY2020 - the segment's rapid growth is generating a genuinely rising NPL trend, not just noise, a pattern flagged since Q2 2021.
Consumer grew 3.3% YoY (+Rp4.6 trillion), roughly matching Q2's pace. NPL worsened to 1.87% from 1.79% at Q2, extending the gradual retail-book deterioration this series has tracked since Q1 2020.
Small Commercial shrank 0.9% YoY (-Rp1.9 trillion), reversing Q2's modest growth, with NPL worsening to 4.27% from 4.14%. Medium grew a modest 1.7% YoY (+Rp0.4 trillion) while NPL worsened to 3.40% from 2.99% - a reversal of the sharpest credit-quality turnaround this series had recorded for any segment.
Corporate Non-SOE loans grew 5.5% YoY (+Rp5.3 trillion), and NPL eased to 10.89% from Q2's 11.25% (on this quarter's own trend table - see Beyond the Usual for the discrepancy with the figure reported last quarter) - a second straight quarter of improvement. SoE loans contracted 6.7% YoY (-Rp5.8 trillion), a much shallower pullback than Q2's 20.3% contraction, with NPL easing to 1.75% from 1.96% - still the cleanest large segment on asset quality even as its book keeps shrinking.
Segment Comparison
The roles have flipped from last quarter. Corporate, the segment whose NPL reversal defined Q2's post, improved for a second straight quarter to 10.89% - while Medium, the one segment that had improved every single reading this year (6.79% → 4.61% → 4.46% → 2.99%), just broke that streak, worsening to 3.40%. Micro, Consumer, and Small all continued the same modest, structurally-expected NPL creep that's tracked their loan growth all year, and SoE kept improving on shrinking exposure. No segment this quarter tells a story as clean as either "everything's fine" or "everything's deteriorating" - Corporate's improvement and Medium's reversal roughly offset each other, leaving the total NPL ratio essentially flat at 3.29% from Q2's 3.27%.
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. Most of the findings below come from BRI's own investor presentation and the filing's board-of-management disclosure rather than footnotes proper - but this quarter's presentation itself carries an unusually large amount of material worth mining, driven by the Ultra Micro Holding transaction.
Credit Cost Breached the Guidance BRI Raised Just One Quarter Ago
BRI's own "2021 Guidance" slide this quarter lists Credit Cost's target range as "3.5%-3.7%" against an actual nine-month reading of **3.79%** - a miss on the very metric management specifically revised upward last quarter (from "±3.1%" to "3.5%-3.7%," see Q2's Beyond the Usual) to signal it was getting ahead of deteriorating asset quality. Every other line item on that guidance slide - Loan Growth (6.1% actual vs. 6%-7% target), LDR (83.05% vs. ±85%), NIM (6.86% vs. ±6.7%), Fee Income Growth (8.3% vs. ±8%), Opex Growth (9.0% vs. 8%-10%), and NPL (3.29% vs. 3.3%-3.5%) - landed inside or beat its own target. Credit Cost is the lone miss, and the presentation doesn't call it out or explain it anywhere in the guidance slide itself, even though Credit Cost actually *improved* quarter-over-quarter (down from 4.12% at Q2) - the miss is a full-year cumulative-average effect from H1's series-high reading, not a Q3 problem in isolation, but the slide doesn't say so.
The Ultra Micro Holding Went From Announcement to Completion in One Quarter
On September 13, 2021, BRI completed the formation of The Ultra Micro Holding Company (UMi Holding), integrating pawnshop lender Pegadaian and micro-finance company PNM into the group. The mechanism was a rights issue with total proceeds of Rp95.92 trillion, oversubscribed at 101.53%: Rp41.15 trillion came in cash from public shareholders (recorded in this quarter's cash flow statement as a Rp41,059,206 million increase in stock capital), and the remaining Rp54.77 trillion came from the Indonesian government transferring its 99.99% ownership stakes in Pegadaian and PNM to BRI as an in-kind capital contribution. BRI issued roughly 28.2 billion new shares to complete the transaction, on top of the approximately 123.3 billion already outstanding. Government ownership was essentially unchanged at 56.82% (from 56.75%), since the government's own in-kind contribution kept pace with the cash raised from public shareholders - meaning existing minority shareholders were not meaningfully diluted in economic terms even though the share count grew by roughly 23%.
The Series-High CAR Is a Capital Injection, Not Retained Earnings
Bank-only Total CAR jumped from 19.63% at Q2 2021 to **24.37%** this quarter - a 4.74-percentage-point move in a single quarter, dwarfing any prior quarterly change in this series' CAR series. The driver is the Rp41.15 trillion cash injection from the Ultra Micro Holding rights issue landing directly in BRI's paid-in capital account, not a change in retained earnings, risk-weighted asset composition, or underlying loss-absorption discipline. Tier 1 CAR moved the same way, from 18.62% to 23.36%. Read in isolation, a CAR this high could imply BRI has meaningfully more room to absorb a future credit shock than it did three months ago - which is technically true in a narrow capital-ratio sense, but the improvement is a corporate-action artifact this quarter, not something that recurs next quarter absent a similar transaction.
Nearly a Third of Ever-Restructured Covid Loans Have Now Exited
BRI's own restructuring waterfall shows Rp239.8 trillion in loans restructured for Covid-19 relief cumulatively since the pandemic began, of which Rp166.2 trillion remained outstanding as restructured at September 30, 2021 - meaning roughly Rp73.6 trillion, or ~30.7% of the cumulative total, has now exited the scheme through principal repayment, reclassification back to normal status, or write-off. That's a sharp acceleration from the ~18% exit rate Q2 2021 reported and the ~13% rate at Q1 2021. On the more cautious side, the internal quality of what's left kept shifting the same direction it has all year: the share of the restructured pool classified Stage 3 (the accounting category signaling the most credit deterioration) rose to 5.80% at Sep 30, 2021 from 4.66% at Q2 2021, while Stage 1 (least deteriorated) fell to 85.94% from 89.73%. A shrinking pool with a rising Stage 3 share inside it is the same pattern flagged last quarter - consistent with healthier borrowers being the ones exiting fastest, leaving a somewhat riskier residual behind even as the headline balance keeps shrinking.
This Quarter's Corporate NPL Trend Table Doesn't Match Last Quarter's
BRI's Q3 2021 presentation reports Corporate segment NPL at 11.25% for June 30, 2021 - but [Q2 2021's own post](/analysis/bbri/2021-06/#key-operational-metrics), sourced from that quarter's own presentation, reported the same June 30, 2021 figure as 11.81%. Both numbers come from BRI's own investor materials, just from different quarters' editions of what appears to be the same trend table, and neither this quarter's nor last quarter's presentation flags the change or explains a methodology shift. It's a small enough gap (0.56 percentage points) that it doesn't change the qualitative read - Corporate NPL was still elevated and still moving - but a reader comparing across quarters' posts by hand would hit exactly this kind of unexplained restatement, and it's worth flagging as a comparative-basis quirk rather than silently picking whichever number happens to appear in the newer deck.
BRI's Boardroom Governance Story From Last Quarter Reached Its Next Step
Q2 2021's post covered Ari Kuncoro's resignation as Vice President Commissioner following a public conflict-of-interest backlash over his concurrent role as Rector of Universitas Indonesia. This filing discloses the next step: BRI's Extraordinary General Meeting of Shareholders on October 7, 2021 - after this quarter's period-end but before this filing was signed - approved Rofikoh Rokhim as the new Vice President Commissioner/Independent Commissioner, alongside Heri Sunaryadi as an additional Independent Commissioner. Both appointments still require OJK's Fit and Proper Test approval before the appointees can formally exercise their duties, per the filing's own notes.
Target Valuation Range
~18.5x P/E, ~2.10x P/B. Bottom line: BRI looks statistically cheaper than last quarter on both P/E and P/B, but most of that compression is either a rights-issue capital-structure effect or an incomplete annualization, not the market repricing the business downward. Call it fairly valued - next quarter's multiples, once Pegadaian and PNM are fully consolidated into a normal comparison base, will be a cleaner read than this one.
BRI's stock closed at approximately Rp3,850.00 on September 30, 2021, per publicly available exchange price data - up 7.5% from Q2 2021's Rp3,581.76 close, a normal move that doesn't need its own dedicated section. Over the trailing two years (October 2019-September 2021) the price still ranges as high as roughly Rp4,281.74 (February 2021) and as low as roughly Rp2,481.78 (April 2020) - the same 42.0% peak-to-trough Covid-19 crash-and-recovery arc described in prior quarters; this quarter's own move sits well inside that established range. BRI's stock hasn't split since 2017, so no adjustment is needed to compare this quarter's nominal price against those prior quarters' own figures.
Annualizing the standalone Q3 2021 quarter's own EPS (Rp52 × 4 ≈ Rp208, derived the same way as Q2 2021's EPS figure by isolating the single quarter's contribution rather than doubling or tripling the cumulative number) gives a P/E» of approximately 18.5x against the Rp3,850.00 close - down from Q2's ~19.6x even though both the price and standalone quarterly profit both rose, because the share price's 7.5% QoQ gain lagged the ~20% QoQ jump in annualized earnings.
Book value per share is approximately Rp1,830 (Rp277,284,545 million total equity attributable to owners ÷ approximately 151.5 billion shares outstanding, reflecting the roughly 123.3 billion shares outstanding before the rights issue plus the ~28.2 billion new shares issued to complete it). This decline is mostly a dilution effect, not a valuation call by the market: total equity attributable to owners grew faster (+41%) than the share price (+7.5%) because the rights issue added both new capital and roughly 23% more shares in the same move, and book value per share (+14.6% QoQ) simply outpaced the price.
| Market cap → book value | Q3 2021 |
|---|---|
| Share price (period-end) | Rp3,850.00 |
| Shares outstanding | ~151,559 million |
| Market capitalization | ~Rp583,502B (~$40.76B, using this quarter's disclosed Rp14,312.50/USD rate) |
| Total equity attributable to owners (book value) | Rp277,285B |
| P/B» | ~2.10x |
| Peer-multiple sanity check | Q2 2021 | Q3 2021 | Change |
|---|---|---|---|
| P/E» | ~19.6x | ~18.5x | ✅ down - price gain lagged the ~20% QoQ jump in annualized earnings |
| P/B» | ~2.24x | ~2.10x | ✅ down - mostly a rights-issue dilution effect, not a market re-rating |
The same-period peer read: BBCA's own Q3 2021 post reported an annualized P/E of ~24.6x, using the same standalone-quarter methodology - a gap of roughly 6.1x versus BRI's ~18.5x, modestly wider than Q2's ~5.4x gap, reversing that quarter's narrowing trend. BCA's own Q3 2021 numbers showed asset quality holding essentially flat through the same Delta wave, while BRI's quarter carries the added complexity of a major corporate action - the market may simply be waiting for a cleaner read on BRI before compressing that gap further.
A full DCF still isn't included here, for largely the same reasons every prior post in this series has given, with a new one added this quarter: Pegadaian and PNM only joined the consolidated group on September 13, 2021, so this quarter's balance sheet and (proportionally) its income statement include roughly two-and-a-half weeks of two new subsidiaries whose full standalone earnings contribution isn't yet visible in a clean multi-quarter trend. Combined with Credit Cost still running above its own raised guidance and the restructured loan pool's internal quality still shifting (see Beyond the Usual), there isn't yet a stable enough base for multi-year 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, unaudited) as of September 30, 2021 and for the nine-month period then ended, together with its Q3 2021 (9M'21) investor presentation.