Revenue Growth Comes Back, But So Does the Price of Funding It
FY2022's post closed on a genuine warning sign: standalone Q4 2022's Net Interest and Net Premium Income, net, had actually fallen 8.27% YoY, with the quarter's profit held up almost entirely by a 62.17% YoY drop in impairment charges rather than any real revenue growth. That question carries directly into this quarter - and the answer is a clean reversal. Q1 2023's consolidated Net Interest and Net Premium Income, net, grew 8.26% YoY to Rp33,221,499 million, and consolidated net income attributable to owners grew 27.42% YoY to Rp15,501,857 million - a genuinely broad-based quarter rather than a provisioning-driven one, with Operating Income up 27.62% YoY and impairment for financial assets down a more modest 10.47% YoY (nowhere near Q4's 62% swing).
What didn't reverse: bank-only Total CAR», which eased again to 23.01% from Dec 2022's 23.30% - a third consecutive quarterly decline going back to 9M 2022's 24.00% peak, though this quarter's -0.29 percentage-point drop is smaller than Q4's own -0.70 point slide, suggesting the erosion is decelerating rather than compounding. And a new pressure point showed up this quarter that wasn't part of last quarter's story at all: bank-only Cost of Funds jumped to 2.56% from Dec 2022's 1.87% and Q1 2022's 1.73% - the sharpest single-quarter Cost of Funds move this series has recorded - driven substantially by the FY2022 dividend's Q1 accrual working through the balance sheet (see Beyond the Usual) alongside the global rate-hiking cycle BRI's own presentation cites directly as a "Key Challenge" this quarter.
The Prescription
BRI should lean harder into defending its CASA» franchise specifically through the dividend-payment window each year, rather than treating the seasonal CASA dip and Cost of Funds spike as an unavoidable, unaddressed cost of the annual payout cycle. This is now a pattern this series has tracked twice - Q1 2022's post flagged the same FY2021 dividend distribution shrinking equity that quarter, and this quarter's Cost of Funds jump is the clearest funding-cost consequence of it yet. A bank with BRI's scale and branch density has room to smooth this with targeted short-term CASA campaigns timed to the payout window rather than letting Cost of Funds absorb the full impact every April.
What BRI should stop doing: continuing its share buyback while bank-only Total CAR keeps drifting lower for a third straight quarter. Treasury stock grew again this quarter - from Rp2,202,178 million (Dec 2022) to Rp3,019,133 million (Mar 2023), roughly another Rp817 billion of repurchases - the same tension FY2022's post flagged when CAR first reversed course, now extended into a second quarter without any acknowledgment in BRI's own materials that the two are in any tension at all.
Key Financial Metrics
Three months ended March 31, 2023 vs. three months ended March 31, 2022 (consolidated), unless noted
FX: Rp14,994.50 = USD 1 as of March 31, 2023, per BRI's own filed financial statements' disclosure - a 3.68% Rupiah appreciation from Dec 2022's Rp15,567.50 and a 4.35% depreciation from Q1 2022's Rp14,369.00.
| Metric | Q1 2023 (IDR) | Q1 2023 (USD) | Q1 2022 (IDR) | YoY |
|---|---|---|---|---|
| Net Interest and Net Premium Income, net ("Net Revenue" equivalent) | Rp33,221,499M | ~$2,216M | Rp30,685,422M | ✅ +8.26% |
| Operating Income (Profit from Operations) | Rp19,556,371M | ~$1,304M | Rp15,323,872M | ✅ +27.62% |
| Net Income (attributable to owners) | Rp15,501,857M | ~$1,034M | Rp12,167,224M | ✅ +27.42% |
| Net Income (total consolidated, incl. non-controlling interests) | Rp15,563,915M | ~$1,038M | Rp12,219,621M | ✅ +27.37% |
| EPS (basic, attributable to owners, quarterly) | Rp103 | ~$0.0069 | Rp80 | ✅ +28.75% |
| Impairment for financial assets | Rp7,093,358M | ~$473M | Rp7,922,743M | ✅ -10.47% (lower is better) |
Balance sheet: March 2023 vs. December 2022 (QoQ) and March 2022 (YoY), consolidated
| Balance sheet metric | Mar 2023 (IDR) | Mar 2023 (USD) | Dec 2022 (IDR) | QoQ | Mar 2022 (IDR) | YoY |
|---|---|---|---|---|---|---|
| Total Assets | Rp1,822,973B | ~$121,585M | Rp1,865,639B | ⚠️ -2.29% | Rp1,650,279B | ✅ +10.46% |
| Loans and Financing (gross) | Rp1,180,121B | ~$78,703M | Rp1,139,077B | ✅ +3.60% | Rp1,075,927B | ✅ +9.69% |
| Total Deposits | Rp1,255,453B | ~$83,730M | Rp1,307,884B | ⚠️ -4.01% | Rp1,126,495B | ✅ +11.45% |
| Total Equity (incl. non-controlling interest) | Rp284,451B | ~$18,970M | Rp303,395B | ⚠️ -6.25% | Rp275,986B | ✅ +3.07% |
| Total Cash and Cash Equivalents (per cash flow statement, period-end) | Rp196,088B | ~$13,077M | Rp268,192B | ⚠️ -26.89% | Rp144,483B | ✅ +35.72% |
Total Equity's QoQ decline and part of the cash drop are explained by the FY2022 dividend appropriation running through Q1's financing activities (see Beyond the Usual) even though the cash itself wasn't paid out until April 12, 2023.
Key Operational Metrics
Bank-only, per BRI's own filed financial-ratio table and investor presentation, unless stated
- CASA»: 64.79% (Mar 2023) vs Dec 2022's 66.92% ⚠️ and 63.75% (Mar 2022) ✅ - giving back part of Q4's outsized jump, consistent with the dividend-related deposit dynamics flagged above, though still ahead of a year ago.
- Loan-to-Deposit Ratio (LDR)»: 85.26% (Mar 2023) vs Dec 2022's 79.17% ⚠️ and 87.14% (Mar 2022) - up sharply QoQ as the CASA pullback above reversed some of Q4's deposit surge, but still below a year ago.
- Net Interest Margin (NIM), bank-only: 6.67% (Mar 2023) vs Dec 2022's 6.80% ⚠️ and 6.85% (Mar 2022) ⚠️ - down on both counts. On BRI's own consolidated guidance basis, NIM» instead rose to 7.82% from 7.72% a year ago, comfortably inside the fresh 7.7%-7.9% FY2023 band - a widening bank-only-vs-consolidated gap worth watching (see Beyond the Usual).
- ROA» (after tax, bank-only): 3.27% (Mar 2023) vs 3.03% (Dec 2022) ✅ and 2.84% (Mar 2022) ✅ - improved on both counts.
- ROE» (book value, bank-only): 18.97% (Mar 2023) vs 16.76% (Dec 2022) ✅ and 15.39% (Mar 2022) ✅ - also improved on both counts.
- CAR» (Total, bank-only): 23.01% (Mar 2023), down from Dec 2022's 23.30% ⚠️ but up from Mar 2022's 22.39% ✅ - see above for the multi-quarter trend. Tier 1 CAR: 21.94% (Mar 2023) vs 22.30% (Dec 2022) and 21.39% (Mar 2022).
- NPL ratio - gross (bank-only): 3.02% (Mar 2023) vs Dec 2022's 2.82% ⚠️ and 3.15% (Mar 2022) ✅ - worse QoQ, better YoY. NPL ratio - net: 0.82% (Mar 2023) vs 0.73% (Dec 2022) ⚠️ and 0.77% (Mar 2022) ⚠️.
- NPL Coverage Ratio (bank-only): 268.93% (Mar 2023) vs Dec 2022's series-high 291.54% ⚠️ and 275.66% (Mar 2022) ⚠️ - down on both counts, the first quarter in this series' recent run where coverage fell YoY as well as QoQ.
- Loan at Risk (LAR)» (bank-only, incl. Covid-19 restructuring): 16.89% of total loans (Mar 2023) vs Dec 2022's 17.11% ✅ and 22.58% (Mar 2022) ✅ - continuing the steady improvement. LAR Coverage: 48.02% (Mar 2023) vs 48.00% (Dec 2022) and 38.50% (Mar 2022) ✅.
- Credit Cost (bank-only): 2.44% (Q1 2023, quarterly) vs 2.47% (FY2022, full-year cumulative) ✅ and 2.96% (Q1 2022, quarterly) ✅ - continuing to improve, though not directly comparable across the quarterly/annual bases shown.
- BOPO» (Opex/Opr. Income, bank-only): 60.70% (Mar 2023) vs 64.20% (Dec 2022) ✅ and 64.26% (Mar 2022) ✅ - improved sharply on both counts.
- Cost of Fund (CoF), bank-only: 2.56% (Mar 2023) vs 1.87% (Dec 2022) ⚠️ and 1.73% (Mar 2022) ⚠️ - the single largest move on this list; see Beyond the Usual for the dividend-driven explanation.
Business Lines: Loan Growth and Credit Quality
YoY, bank-only, per BRI's own investor presentation
Micro loans grew 11.2% YoY - still growing, but a step down from FY2022's 13.3%. Its NPL worsened to 2.24% from FY2022's 1.74% and Q1 2022's 1.77% - the same rapid-growth-driven credit-quality trade-off this series has tracked since 2021, now showing up on both the QoQ and YoY comparisons at once for the first time in several quarters.
Consumer grew 13.7% YoY, its fastest reading in this series' recent history and a sharp acceleration from FY2022's 8.3%. NPL worsened to 2.01% from FY2022's 1.83%, though it remains better than Q1 2022's 1.93%.
Small grew just 2.1% YoY, a sharp deceleration from FY2022's 6.2% and the slowest-growing segment this quarter by a wide margin. NPL worsened to 4.45% from FY2022's 4.30%.
Medium grew 16.2% YoY - the fastest-growing segment this quarter, continuing and extending FY2022's reversal into growth (which was just +0.7% for the full year). Its NPL improved sharply to 2.06% from Q1 2022's 3.95% and FY2022's 2.26% - both growth and credit quality moved the right direction at once, extending the pattern FY2022 first showed.
Corporate grew 10.3% YoY, extending FY2022's 4.8% acceleration further. NPL improved to 4.19% from Q1 2022's 5.89% and FY2022's 4.68% - continuing its multi-year cleanup.
Segment Comparison
Total bank-only loan growth came in at 9.3% YoY (consolidated Total Loan & Financing, including subsidiary financing, grew 9.7%), broadly similar in pace to FY2022's 9.1%. The composition shifted meaningfully this quarter, though: Medium overtook Micro as the fastest-growing segment (16.2% vs 11.2%) for the first time in this series' recent history, and did so while its NPL kept improving rather than worsening - the "growing again and cleaner" pattern FY2022 first flagged for Medium has now extended into a second quarter. Small is the clear laggard, decelerating sharply to 2.1% growth while its NPL still worsened - the only segment showing weaker growth and weaker credit quality at once this quarter. Micro and Consumer, the two retail segments carrying the bulk of BRI's loan book, both grew respectably but both saw NPL tick up YoY as well as QoQ - a reminder that the retail-growth-versus-credit-quality trade-off this series has tracked since 2021 hasn't gone away even as Medium and Corporate have turned it around.
Beyond the Usual
This quarter's source documents are BRI's unaudited interim consolidated financial statements as of March 31, 2023 (a condensed OJK-format Published Financial Report, with fewer discursive notes than the FY2022 audited annual report) alongside BRI's Q1 2023 investor presentation.
BRI's Fresh FY2023 Guidance Already Shows Two Misses in Its First Quarter
BRI's Q1 2023 investor presentation states its new FY2023 guidance bands against Q1 2023's actual results: Loan Growth came in at 9.7% against a 10%-12% FY2023 band (below range), and NPL came in at 2.86% (consolidated) against a 2.6%-2.8% band (above range) - two of five lines already outside their bands one quarter into the guidance year. The other three lines sit comfortably inside or ahead of their bands: NIM at 7.82% (7.7%-7.9% band), Cost of Credit at 2.39% (2.2%-2.4% band), and Bank-Only CIR at 37.37%, well inside its 40%-41.5% band. This is a similar overall pattern to [Q1 2022's post](/analysis/bbri/2022-03/#beyond-the-usual), which found NIM and NPL already outside their own freshly-issued FY2022 bands in that guidance year's first quarter too - a recurring signal that BRI's own guidance bands, whatever their basis, tend to get tested almost immediately rather than holding for a full year.
Bank-Only CAR Kept Drifting Down for a Third Straight Quarter, While a Buyback Quietly Continued
Bank-only Total CAR eased to 23.01% (Mar 2023) from Dec 2022's 23.30%, extending the decline first flagged in the FY2022 post from 9M 2022's 24.00% peak - though this quarter's -0.29 percentage-point drop is smaller than Q4's own -0.70 point slide. Meanwhile, BRI's balance sheet shows treasury stock growing further this quarter, from Rp2,202,178 million (Dec 2022) to Rp3,019,133 million (Mar 2023) - roughly another Rp817 billion of share repurchases under the same buyback program FY2022's post flagged as running the same year CAR first reversed. Continued buybacks alongside a third straight quarterly CAR decline is not concerning on its own given BRI's capital levels remain well above regulatory minimums and its own presentation explicitly frames "Capital Remains Above Optimum Level" as a challenge to be worked down - but it means the capital cushion built up through 2021's rights issue keeps getting drawn on from two directions (loan growth and buybacks) at once, without BRI's own materials acknowledging the two draws are related.
The Bank-Only and Consolidated NIM Readings Are Now Moving in Opposite Directions
BRI's bank-only (individual, statutory) Net Interest Margin fell to 6.67% (Mar 2023) from 6.85% a year earlier, while the consolidated NIM BRI's own guidance table tracks rose to 7.82% from 7.72% over the same period - a genuinely widening gap between the two scopes rather than the roughly-parallel readings this series has generally seen in prior quarters. The gap is best explained by the Ultra Micro Holding subsidiaries (Pegadaian, PNM), whose lending yields run far above BRI's own bank-only book - PNM's group-lending arm alone discloses a NIM of 28.4% in its own subsidiary-level disclosure this quarter - meaning consolidated NIM increasingly reflects subsidiary mix as much as the core bank's own margin trend. This is a genuinely interesting scope nuance for a reader trying to reconcile the two NIM figures BRI reports side by side, not a sign either number is wrong.
The FY2022 Dividend Was Accrued in Q1's Cash Flow Statement Before It Was Actually Paid
BRI's board approved an 85% dividend payout ratio on FY2022 earnings - Rp288.22 per share in total, including a Rp57 per share interim dividend already paid earlier - with the balance's payment date set for April 12, 2023, twelve days after this quarter's March 31 close. Even so, Q1 2023's cash flow statement already shows a Rp43,494,766 million "Appropriation for dividends" line within financing activities, the single largest driver of this quarter's Rp72.0 trillion net decrease in cash and cash equivalents. This is standard accrual-basis treatment once a dividend is declared, not a disclosure problem, but it means the cash and CASA pressure visible in this quarter's balance sheet substantially reflects a payment that, cash-wise, hadn't actually gone out the door yet as of March 31.
A Routine Board Change Shows Up Only in the Filing's Signature Block
BRI's Q1 2023 filing discloses that Commissioner Hadiyanto was honorably discharged at BRI's General Meeting of Shareholders on March 13, 2023, with incoming Commissioner Awan Nurmawan Nuh's appointment pending final approval from Indonesia's Financial Services Authority (OJK). Neither BRI's headline investor presentation nor its financial highlights mention this change; it appears only in the management-and-shareholder listing at the end of the statutory filing. It's a routine, disclosed governance transition rather than anything substantive, but a reminder that board-composition changes at a state-owned bank this size are worth tracking from the primary filing rather than the investor deck alone.
Target Valuation Range
~11.48x P/E, ~2.56x P/B. Bottom line: BRI remains meaningfully cheaper than BCA on both P/E and P/B this quarter, but the growth-rate gap that helped justify a narrowing valuation gap at FY2022 flipped in BCA's favor this quarter (BCA's 43.0% YoY net income growth outpaced BRI's 27.4%) - yet BRI's discount to BCA actually widened rather than closed, a genuinely inconsistent signal worth watching rather than a clean re-rating case either way.
Annualizing Q1 2023's basic EPS of Rp103 (×4 = Rp412) against BRI's Rp4,730.00 close on March 31, 2023 (down 4.25% from FY2022's Rp4,940.00) gives a P/E» of approximately 11.48x - cheaper than both FY2022's ~14.62x (which used the full year's actual, not annualized, EPS) and Q1 2022's own ~14.6x annualized reading, a genuine compression on a like-for-like annualized basis even though this quarter's EPS itself grew nearly 29% YoY - the multiple compressed because the share price fell while earnings grew.
Book value per share is approximately Rp1,845 (Rp279,584,023 million total equity attributable to owners ÷ 151,559,001,604 shares outstanding, unchanged since Q3 2021).
| Market cap → book value | Q1 2023 |
|---|---|
| Share price (period-end) | Rp4,730.00 |
| Shares outstanding | 151,559,001,604 |
| Market capitalization | ~Rp716,874B (~$47.81B, using this quarter's disclosed Rp14,994.50/USD rate) |
| Total equity attributable to owners (book value) | Rp279,584B |
| P/B» | ~2.56x |
| Peer-multiple sanity check | FY2022 | Q1 2023 | Change |
|---|---|---|---|
| P/E» | ~14.62x (full-year) | ~11.48x (annualized) | ✅ down - genuine compression even though EPS itself grew ~29% YoY |
| P/B» | ~2.50x | ~2.56x | ⚠️ up slightly - book value per share fell faster (largely the dividend appropriation) than the share price itself declined |
BBCA's own Q1 2023 post reported an annualized P/E of ~23.3x and a P/B of ~5.11x, using the same methodology - a gap of roughly 11.82x on P/E and 2.55x on P/B versus BRI's ~11.48x and ~2.56x. That P/E gap is essentially in line with FY2022's ~11.3x reading (methodology differs slightly - FY2022 used full-year actual EPS on both sides, this quarter uses annualized quarterly EPS on both sides), but the underlying growth comparison flipped: BCA's Q1 2023 net income grew 43.0% YoY against BRI's 27.4%, a reversal of FY2022's pattern where BRI's 64.72% comfortably outpaced BCA's 29.6%. A valuation gap holding roughly steady while the growth-rate advantage that partly explained it switches sides is worth watching over the next couple of quarters rather than reading as settled either way.
A full DCF still isn't included here, for the same reasons every prior post in this series has given - the peer-multiple read above remains the more reliable lens until a longer run of genuinely clean, comparably-consolidated quarters builds up around this one.
PT Bank Rakyat Indonesia (Persero) Tbk's unaudited interim consolidated financial statements as of March 31, 2023 and for the three-month period then ended, its unaudited OJK-format published financial report for the same period, and its Q1 2023 investor presentation.