The Quarter Profit Grew While Revenue Didn't
H1 2023's headline looks like a clean continuation of Q1's reversal: consolidated Net Interest and Net Premium Income, net, grew to Rp66,427,604 million for the half (+1.47% YoY) and consolidated net income attributable to owners grew 18.70% YoY to Rp29,421,509 million. But that half-year revenue growth of just 1.47% is a sharp deceleration from Q1's own 8.26% YoY pace on its own - and isolating standalone Q2 2023 (H1 minus Q1) shows why: Net Interest and Net Premium Income, net, actually fell 4.53% YoY in the quarter itself, to Rp33,206,105 million from Rp34,782,872 million a year earlier - the first quarterly revenue decline this series has recorded for BRI.
Operating Income still grew a healthy 11.71% YoY in the same standalone quarter, and net income attributable to owners grew 10.31% YoY - profit kept climbing even as the top line shrank. The reconciliation is impairment: standalone Q2 2023's impairment for financial assets fell to Rp6,924,239 million from Rp9,570,585 million a year earlier, a 27.65% YoY drop that did more than offset the revenue contraction. This is the inverse of Q4 2022's warning, where falling impairment covered for genuinely weak revenue and this series flagged it as something to watch - the pattern has now recurred, just with a shallower revenue decline and a much bigger provisioning tailwind behind it.
The Prescription
BRI should treat standalone-quarter revenue, not just the cumulative half-year or full-year figure, as the number its own investor materials lead with - the H1 growth rate this quarter (1.47%) told a materially more comfortable story than the standalone Q2 print (-4.53%) that actually drove it, and a reader relying only on the cumulative figure would have missed the deceleration entirely. Publishing (or at least emphasizing) the standalone-quarter breakdown alongside the cumulative figures, the way FY2022's post already called for after the same masking effect showed up in Q4, would let the market price the actual quarterly trend rather than a blended average of a strong Q1 and a weak Q2.
What BRI should stop doing: leaning on falling impairment charges to cover for revenue weakness two quarters out of the last three this series has covered (Q4 2022 and now Q2 2023). A 27.65% YoY drop in impairment is a genuinely welcome credit-quality signal on its own, but it is doing the heavy lifting for profit growth this quarter in a way that isn't repeatable indefinitely - if standalone revenue doesn't return to growth, the next quarter's impairment line has to keep shrinking just to hold net income flat.
Key Financial Metrics
Standalone Q2 2023 (Apr-Jun) vs standalone Q2 2022 (consolidated), derived by subtracting each year's Q1 cumulative from its H1 cumulative, unless noted
FX: Rp14,992.50 = USD 1 as of June 30, 2023, per BRI's own filed financial statements' disclosure - essentially flat (a 0.01% Rupiah appreciation) from Mar 2023's Rp14,994.50 and a 0.65% depreciation from Jun 2022's Rp14,897.50.
| Metric | Q2 2023 (IDR) | Q2 2023 (USD) | Q2 2022 (IDR) | YoY |
|---|---|---|---|---|
| Net Interest and Net Premium Income, net ("Net Revenue" equivalent) | Rp33,206,105M | ~$2,215M | Rp34,782,872M | ⚠️ -4.53% |
| Operating Income (Profit from Operations) | Rp17,684,416M | ~$1,180M | Rp15,830,453M | ✅ +11.71% |
| Net Income (attributable to owners) | Rp13,919,652M | ~$929M | Rp12,618,981M | ✅ +10.31% |
| Net Income (total consolidated, incl. non-controlling interests) | Rp13,997,446M | ~$934M | Rp12,656,650M | ✅ +10.60% |
| EPS (basic, attributable to owners, quarterly) | Rp92 | ~$0.0061 | Rp84 | ✅ +9.52% |
| Impairment for financial assets | Rp6,924,239M | ~$462M | Rp9,570,585M | ✅ -27.65% (lower is better) |
Balance sheet: June 2023 vs. March 2023 (QoQ) and June 2022 (YoY), consolidated
| Balance sheet metric | Jun 2023 (IDR) | Jun 2023 (USD) | Mar 2023 (IDR) | QoQ | Jun 2022 (IDR) | YoY |
|---|---|---|---|---|---|---|
| Total Assets | Rp1,805,146B | ~$120,406M | Rp1,822,973B | ⚠️ -0.98% | Rp1,652,839B | ✅ +9.21% |
| Total Loan & Financing (gross, incl. subsidiaries) | Rp1,202,129B | ~$80,183M | Rp1,180,121B | ✅ +1.87% | Rp1,104,785B | ✅ +8.83% |
| Total Deposits (Third Party Funds) | Rp1,245,115B | ~$83,048M | Rp1,255,453B | ⚠️ -0.82% | Rp1,136,982B | ✅ +9.51% |
| Total Equity (incl. non-controlling interest) | Rp298,492B | ~$19,911M | Rp284,451B | ✅ +4.94% | Rp286,265B | ✅ +4.27% |
| Total Cash and Cash Equivalents (per cash flow statement, period-end) | Rp183,419B | ~$12,236M | Rp196,088B | ⚠️ -6.46% | Rp149,593B | ✅ +22.61% |
The FY2022 dividend's Rp43,494,766 million cash payment (see Beyond the Usual) actually left the bank's accounts this quarter, on April 12, 2023 - the counterpart to the accrual [Q1's post flagged](/analysis/bbri/2023-03/#beyond-the-usual) as already booked before the cash moved.
Key Operational Metrics
Bank-only, per BRI's own filed financial-ratio table and investor presentation, unless stated
- CASA»: 65.68% (Jun 2023) vs Mar 2023's 64.79% ✅ and 65.36% (Jun 2022) ✅ - improved on both counts, recovering the ground Q1 gave back.
- Loan-to-Deposit Ratio (LDR)»: 87.83% (Jun 2023) vs Mar 2023's 85.26% ⚠️ and 88.95% (Jun 2022) - up QoQ as deposit growth lagged loan growth, but still below a year ago.
- Net Interest Margin (NIM), bank-only: 6.81% (Jun 2023) vs Mar 2023's 6.67% ✅ and 7.35% (Jun 2022) ⚠️ - up QoQ, still down YoY. On BRI's own consolidated guidance basis, NIM» held at 7.85% (from 7.82% Q1 basis and 8.24% a year ago), sitting at the higher end of the fresh 7.7%-7.9% FY2023 band.
- ROA» (after tax, bank-only): 3.14% (Jun 2023) vs 3.27% (Mar 2023) ⚠️ and 3.11% (Jun 2022) ✅ - eased QoQ, still ahead YoY.
- ROE» (book value, bank-only): 18.40% (Jun 2023) vs 18.97% (Mar 2023) ⚠️ and 17.08% (Jun 2022) ✅ - same pattern as ROA.
- CAR» (Total, bank-only): 24.65% (Jun 2023), up sharply from Mar 2023's 23.01% ✅ and Jun 2022's 22.97% ✅ - reversing three straight quarters of decline in a single move (see Beyond the Usual). Tier 1 CAR: 23.53% (Jun 2023) vs 21.94% (Mar 2023) and 21.97% (Jun 2022).
- NPL ratio - gross (bank-only): 3.10% (Jun 2023) vs Mar 2023's 3.02% ⚠️ and 3.32% (Jun 2022) ✅ - worse QoQ, better YoY, continuing Q1's pattern. NPL ratio - net: 0.76% (Jun 2023) vs 0.82% (Mar 2023) ✅ and 0.86% (Jun 2022) ✅.
- NPL Coverage Ratio (bank-only): 236.47% (Jun 2023) vs Mar 2023's 268.93% ⚠️ and 265.15% (Jun 2022) ⚠️ - down on both counts, extending Q1's first YoY decline into a second quarter.
- Loan at Risk (LAR)» (bank-only, incl. Covid-19 restructuring): 15.09% of total loans (Jun 2023) vs Mar 2023's 16.89% ✅ and 20.78% (Jun 2022) ✅ - continuing the steady improvement. LAR Coverage: 48.63% (Jun 2023) vs 48.02% (Mar 2023) and 42.39% (Jun 2022) ✅.
- Credit Cost (bank-only): 2.27% (Q2 2023, quarterly) vs 2.44% (Q1 2023, quarterly) ✅ and 3.35% (Q2 2022, quarterly) ✅ - continuing to improve on both counts, comfortably inside BRI's fresh 2.2%-2.4% FY2023 band.
- BOPO» (Opex/Opr. Income, bank-only): 64.21% (Jun 2023) vs 60.70% (Mar 2023) ⚠️ and 63.98% (Jun 2022) ⚠️ - worse on both counts, the first BOPO deterioration this series has recorded in several quarters.
- Cost of Fund (CoF), bank-only: 2.66% (Jun 2023) vs 2.56% (Mar 2023) ⚠️ and 1.70% (Jun 2022) ⚠️ - still climbing, though the QoQ move (+0.10 point) is far milder than Q1's dividend-driven spike (see Q1's post).
Business Lines: Loan Growth and Credit Quality
YoY, consolidated, per BRI's own investor presentation
Micro loans grew 11.4% YoY, essentially matching Q1's 11.2%. Its NPL improved slightly to 2.23% from Q1's 2.24%, though it remains well above FY2022's 1.74%.
Consumer grew 12.3% YoY, a step down from Q1's 13.7%. NPL held roughly flat at 2.02% (from Q1's 2.01%), still worse than FY2022's 1.83%.
Small grew 5.1% YoY, more than double Q1's 2.1% - a genuine recovery for the segment that was this series' clear laggard last quarter. NPL improved to 4.29% from Q1's 4.45%, though still above FY2022's 4.30%.
Medium grew 22.7% YoY, extending its run as the fastest-growing segment and accelerating further from Q1's already-strong 16.2%. Its NPL improved again to 2.70% from FY2022's 2.26% and Q1's 2.06% - actually worse than Q1 even as it improved YoY, a reminder that Medium's within-year NPL isn't moving in a straight line even while its multi-quarter trend stays favorable.
Corporate grew just 1.0% YoY, a sharp deceleration from Q1's 10.3% and the slowest-growing segment this quarter by a wide margin - almost the mirror image of last quarter's ranking. NPL worsened QoQ to 4.83% from Q1's 4.19%, though it remains better than Jun 2022's 5.25% on a YoY basis - the segment's growth stall and its QoQ credit-quality slip arrived in the same quarter.
Segment Comparison
Consolidated total loan growth came in at 8.8% YoY, below Q1's 9.7% and now sitting below BRI's own 10%-12% FY2023 guidance band for a second straight quarter (see Beyond the Usual). The segment ranking flipped almost completely from Q1: Corporate, last quarter's second-fastest grower at 10.3%, decelerated to just 1.0% YoY this quarter - the slowest segment by far - while Medium kept accelerating to 22.7% and Small staged a real recovery from 2.1% to 5.1%. Micro and Consumer, BRI's two retail engines, both grew at a similar clip to Q1 (11.4% and 12.3% respectively) with NPL roughly steady rather than clearly improving or worsening - the retail-growth-versus-credit-quality trade-off this series has tracked since 2021 is neither resolving nor worsening this quarter, just holding in place.
Beyond the Usual
This quarter's source documents are BRI's unaudited interim consolidated financial statements as of June 30, 2023 (the same condensed OJK-format Published Financial Report structure as Q1, with limited discursive notes) alongside BRI's 1H23 investor presentation.
Bank-Only CAR Reversed Three Straight Quarters of Decline in a Single Move, While the Buyback Paused
Bank-only Total CAR jumped to 24.65% (Jun 2023) from Mar 2023's 23.01% - a 1.64 percentage-point gain that reverses the three-quarter decline Q1's post tracked from 9M 2022's 24.00% peak, in a single quarter rather than the gradual multi-quarter recovery a capital ratio more typically shows. The balance sheet's treasury stock line held exactly flat at Rp3,019,133 million between March and June 2023 - the first quarter in this series' recent run where it didn't grow - after two consecutive quarters of roughly Rp800 billion in repurchases each. A paused buyback alongside asset growth that outran risk-weighted-asset growth (Total Assets +1.0% QoQ against risk-weighted assets that grew more slowly, per the capital disclosure) is a plausible combination behind the jump, though BRI's own materials don't spell out the mechanics directly.
BRI's FY2023 Guidance Misses Widened Rather Than Narrowed in Their Second Quarter
The same two lines that missed their FY2023 guidance bands in [Q1](/analysis/bbri/2023-03/#beyond-the-usual) - Loan Growth and NPL - are still missing them at the half-year mark, and both gaps widened rather than closed. Loan Growth came in at 8.8% against the 10%-12% band (further below range than Q1's 9.7%), and NPL came in at 2.95% against the 2.6%-2.8% band (further above range than Q1's 2.86%). The other three lines - NIM at 7.85% (comfortably inside 7.7%-7.9%), Credit Cost at 2.26% (inside 2.2%-2.4%), and Bank-Only CIR at 38.96% (well inside 40%-41.5%) - remain on track. BRI's own 1H23 presentation acknowledges the loan-growth shortfall directly, framing it as a deliberate trade-off ("Growth at a Reasonable Price") rather than a miss to be corrected, which is a real strategic choice worth watching rather than treating as an execution failure - but it does mean two of five guidance lines have now missed for two consecutive quarters in the same FY2023 guidance year.
BOPO Worsened for the First Time in Several Quarters
Bank-only BOPO (Operating Expense to Operating Income) rose to 64.21% (Jun 2023) from 60.70% (Mar 2023) and 63.98% (Jun 2022) - the first quarter in this series' recent run where the ratio deteriorated on both a QoQ and YoY basis at once, after a long stretch of steady improvement (64.20% for full-year 2022, 74.30% for FY2021). The move is modest in absolute terms and BRI's cost-to-income ratio on the narrower CIR measure (38.96%) still sits comfortably inside its FY2023 guidance band, but it's a genuinely new direction for a metric that had been one of this series' more consistently improving lines.
PNM and Pegadaian's Subsidiary Cost-to-Income Ratios Remain a Named Drag
BRI's own 1H23 presentation discloses that Ultra Micro Holding subsidiaries PNM and Pegadaian carry cost-to-income ratios of 71% and 55% respectively - both well above BRI's own consolidated 41.79% - and names this explicitly as a "Key Challenge" it expects to improve through cashless collections and digitalization at PNM specifically. This is a level of subsidiary-specific disclosure this series hasn't seen broken out before, and it quantifies just how much of a drag the Ultra Micro integration still represents on a cost basis, even as the same subsidiaries' lending yields (PNM's group-lending arm alone disclosed a 28.4% NIM in Q1's post) pull consolidated NIM higher.
A New OJK Dividend Policy Regulation Is Coming, Directly Relevant to a Recurring Theme in This Series
BRI's 1H23 presentation flags, under "Potential Upcoming Regulations," that Indonesia's Financial Services Authority (OJK) will introduce a formal policy requiring banks to have a defined dividend distribution policy, including the approval mechanism for setting payout amounts. BRI's own dividend cycle - the FY2022 payout's Cost of Funds and CASA effects have been a running thread across Q1 and this quarter's cash payment above - would sit squarely inside whatever this regulation eventually requires, though no draft text or effective date is disclosed yet.
Target Valuation Range
~14.74x P/E, ~2.80x P/B. Bottom line: BRI's valuation discount to BCA narrowed on both P/E and P/B this quarter, but that narrowing came entirely from BRI's own multiple expanding rather than from BRI's growth catching up - its earnings growth rate (18.70% H1 YoY) fell further behind BCA's (34.0% H1 YoY) even as the discount that growth gap would normally argue for got smaller, not bigger.
Annualizing standalone Q2 2023's basic EPS of Rp92 (×4 = Rp368) against BRI's Rp5,425 close on June 27, 2023 (the last trading day of the quarter, up 14.7% from Q1's Rp4,730 close) gives a P/E» of approximately 14.74x - notably higher than Q1's ~11.48x on the same annualized-single-quarter method, since the share price's 14.7% QoQ gain far outpaced the 10.31% YoY (and modest QoQ) growth in the quarter's own earnings.
Book value per share is approximately Rp1,936 (Rp293,518,538 million total equity attributable to owners ÷ 151,559,001,604 shares outstanding, unchanged since Q3 2021).
| Market cap → book value | Q2 2023 |
|---|---|
| Share price (period-end) | Rp5,425.00 |
| Shares outstanding | 151,559,001,604 |
| Market capitalization | ~Rp822,208B (~$54.84B, using this quarter's disclosed Rp14,992.50/USD rate) |
| Total equity attributable to owners (book value) | Rp293,519B |
| P/B» | ~2.80x |
| Peer-multiple sanity check | Q1 2023 | Q2 2023 | Change |
|---|---|---|---|
| P/E» | ~11.48x | ~14.74x | ⚠️ up - share price's 14.7% QoQ gain far outpaced earnings growth |
| P/B» | ~2.56x | ~2.80x | ⚠️ up - share-price gain outpaced book value's own modest growth |
BBCA's own Q2 2023 post reported an annualized P/E of ~22.3x (using BCA's own like-for-like single-quarter method) and a P/B of ~5.02x - a gap to BRI's ~14.74x and ~2.80x of roughly 7.6x on P/E and 2.2x on P/B, both narrower than Q1's ~11.82x and ~2.55x gaps. Nearly all of that narrowing traces to BRI's own multiples rising (P/E 11.48x to 14.74x, P/B 2.56x to 2.80x) rather than BCA's compressing - BCA's own P/E and P/B barely moved over the same period. The growth comparison moved further apart, though: BCA's H1 2023 net income grew 34.0% YoY against BRI's 18.70%, extending the reversal from Q1's 43.0% vs 27.4% - a widening growth gap sitting underneath a narrowing valuation gap, the inconsistency the bottom line above is flagging.
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.
Stock Price: A Sharp Two-Year Climb, Concentrated in the Last Six Months
BRI's shares closed at Rp5,425 on June 27, 2023, up 51.5% over the trailing two years from Jun 2021's Rp3,581.76 close. Most of that gain is recent and front-loaded into 2023 itself: shares troughed at Rp3,372.67 in Jul 2021, then climbed in fits and starts through 2022 before accelerating sharply from Rp4,940 at Dec 2022's close to a window peak of Rp5,575 in May 2023, before easing slightly to the Rp5,425 quarter-end close - a peak-to-trough swing of roughly 65.3% across the full two-year window, comfortably past the threshold for a dedicated section here. No stock split has occurred for BBRI during this window, so these are nominal, unadjusted prices throughout.
PT Bank Rakyat Indonesia (Persero) Tbk's unaudited interim consolidated financial statements as of June 30, 2023 and for the six-month period then ended, and its 1H23 investor presentation.