El Nino Reaches the Loan Book
BRI's 9M 2023 headline reads like a clean continuation of the year: consolidated Net Interest and Net Premium Income, net, grew to Rp103,015,407 million for the nine months (+5.83% YoY) and net income attributable to owners grew 12.35% YoY to Rp43,992,607 million. But isolating standalone Q3 2023 - 9M minus H1, the same method Q2's post used - shows a genuinely different quarter sitting underneath that average.
Standalone Q3 Net Interest and Net Premium Income actually grew 14.81% YoY to Rp36,587,803 million, a sharp reversal from Q2's standalone 4.53% YoY decline - the revenue contraction that series flagged as the first this series had recorded didn't continue into Q3. But net income attributable to owners grew just 1.40% YoY in the same standalone quarter, to Rp14,571,098 million from Rp14,370,028 million - profit growth nearly stalled even as the top line recovered. The reconciliation this time runs the opposite direction from Q2: standalone Q3 impairment for financial assets jumped 29.24% YoY, to Rp9,219,382 million from Rp7,133,588 million, eating almost all of the revenue recovery's contribution to profit.
BRI's own 9M23 investor presentation names a specific driver for part of this: under "Key Challenges," it cites "El Nino that has led to lower rainfall across Indonesia, impacting farmers and fisheries" as a Q3-specific factor behind elevated asset quality stress in the micro and small segments, on top of the "lingering effect of Covid-19" pushing restructured loans into Special Mention and NPL as the pandemic-era relief scheme winds down. This is a genuinely new, weather-linked risk factor this series hasn't seen named explicitly before.
A second divergence worth flagging up front: bank-only (parent, individual) standalone Q3 net profit actually fell approximately 4.65% YoY (Rp12,737,337 million from Rp13,358,878 million, derived the same way from BRI's own bank-only 9M/1H figures), even as the consolidated Group figure above grew 1.40%. The subsidiaries - Pegadaian, PNM, BRI Life, and the rest - are doing more of the work keeping Group profit growth positive than the core bank itself this quarter.
The Prescription
BRI should treat the micro and small segments' weather sensitivity as a structural underwriting input, not a one-quarter explanation after the fact - if El Nino conditions persist into subsequent quarters (a real possibility given El Nino cycles typically run multiple quarters), a bank that only names the driver reactively in its investor materials isn't giving a reader any sense of whether it's actually pricing or hedging that risk into new lending, versus just absorbing the credit cost as it arrives. Some combination of tighter underwriting in the most rainfall-exposed micro/small lending pockets, or partnering on agricultural insurance products for its own borrower base, would turn a disclosed risk into a managed one rather than a recurring surprise line in the impairment charge.
What BRI should stop doing: letting its own FY2023 loan-growth guidance drift from missing low to missing high within the same guidance year without revisiting the band itself (see Beyond the Usual) - a guidance range that gets blown through in both directions inside twelve months isn't functioning as a target management is actually managing to, it's functioning as a number restated after the fact to match whatever happened.
Key Financial Metrics
Standalone Q3 2023 (Jul-Sep) vs standalone Q3 2022 (consolidated), derived by subtracting each year's H1 cumulative from its 9M cumulative, unless noted
FX: Rp15,455.00 = USD 1 as of September 30, 2023, per BRI's own filed financial statements' disclosure - a 3.09% Rupiah depreciation from Jun 2023's Rp14,992.50 and a 1.50% depreciation from Sep 2022's Rp15,227.50.
| Metric | Q3 2023 (IDR) | Q3 2023 (USD) | Q3 2022 (IDR) | YoY |
|---|---|---|---|---|
| Net Interest and Net Premium Income, net ("Net Revenue" equivalent) | Rp36,587,803M | ~$2,367M | Rp31,869,404M | ✅ +14.81% |
| Operating Income (Profit from Operations) | Rp18,968,333M | ~$1,227M | Rp17,719,738M | ✅ +7.05% |
| Net Income (attributable to owners) | Rp14,571,098M | ~$943M | Rp14,370,028M | ⚠️ +1.40% |
| Net Income (total consolidated, incl. non-controlling interests) | Rp14,652,208M | ~$948M | Rp14,435,174M | ⚠️ +1.50% |
| EPS (basic, attributable to owners, quarterly) | Rp97 | ~$0.0063 | Rp95 | ⚠️ +2.11% |
| Impairment for financial assets | Rp9,219,382M | ~$597M | Rp7,133,588M | ⚠️ +29.24% (higher is worse) |
Balance sheet: September 2023 vs. June 2023 (QoQ) and September 2022 (YoY), consolidated
| Balance sheet metric | Sep 2023 (IDR) | Sep 2023 (USD) | Jun 2023 (IDR) | QoQ | Sep 2022 (IDR) | YoY |
|---|---|---|---|---|---|---|
| Total Assets | Rp1,851,965B | ~$119,808M | Rp1,805,146B | ✅ +2.59% | Rp1,684,604B | ✅ +9.93% |
| Total Loan & Financing (gross, incl. subsidiaries) | Rp1,250,715B | ~$80,919M | Rp1,202,129B | ✅ +4.04% | Rp1,111,478B | ✅ +12.53% |
| Total Deposits (Third Party Funds) | Rp1,290,286B | ~$83,476M | Rp1,245,115B | ✅ +3.63% | Rp1,139,765B | ✅ +13.21% |
| Total Equity (incl. non-controlling interest) | Rp311,534B | ~$20,157M | Rp298,492B | ✅ +4.37% | Rp300,336B | ✅ +3.73% |
| Total Cash and Cash Equivalents (per cash flow statement, period-end) | Rp156,132B | ~$10,102M | Rp183,419B | ⚠️ -14.88% | Rp161,150B | ⚠️ -3.11% |
Cash fell sharply both QoQ and YoY as loan growth (see above) outpaced deposit growth and drew down liquid balances rather than reflecting a stress event - loans grew Rp48,586B QoQ against Rp45,171B of deposit growth over the same window.
Key Operational Metrics
Bank-only, per BRI's own filed financial-ratio table and investor presentation, unless stated
- CASA»: 63.81% (Sep 2023) vs Jun 2023's 65.68% ⚠️ and 65.65% (Sep 2022) ⚠️ - down on both counts, giving back Q2's improvement.
- Loan-to-Deposit Ratio (LDR)»: 88.34% (Sep 2023) vs Jun 2023's 87.83% ⚠️ and 88.92% (Sep 2022) ✅ - up QoQ as loan growth again outpaced deposits, still slightly below a year ago.
- Net Interest Margin (NIM), bank-only: 6.97% (Sep 2023) vs Jun 2023's 6.81% ✅ and 7.23% (Sep 2022) ⚠️ - up QoQ, still down YoY. On BRI's own consolidated guidance basis, NIM» rose to 8.05% (from 7.85% at both Jun 2023 and FY2022), overshooting the unchanged 7.7%-7.9% FY2023 band for a second straight quarter (see Beyond the Usual).
- ROA» (after tax, bank-only): 3.09% (Sep 2023) vs 3.14% (Jun 2023) ⚠️ and 3.21% (Sep 2022) ⚠️ - down on both counts.
- ROE» (book value, bank-only): 18.06% (Sep 2023) vs 18.40% (Jun 2023) ⚠️ and 17.58% (Sep 2022) ✅ - down QoQ, still ahead YoY.
- CAR» (Total, bank-only): 25.23% (Sep 2023), up further from Jun 2023's 24.65% ✅ and Sep 2022's 24.00% ✅ - a second straight quarterly increase after Q2's sharp reversal (see Beyond the Usual). Tier 1 CAR: 24.06% (Sep 2023) vs 23.53% (Jun 2023) and 23.00% (Sep 2022).
- NPL ratio - gross (bank-only): 3.23% (Sep 2023) vs Jun 2023's 3.10% ⚠️ and 3.14% (Sep 2022) ⚠️ - worse on both counts, extending Q2's QoQ deterioration into a second quarter. NPL ratio - net: 0.73% (Sep 2023) vs 0.76% (Jun 2023) ✅ and 0.87% (Sep 2022) ✅ - improved on both counts despite the gross ratio worsening.
- NPL Coverage Ratio (bank-only): 217.69% (Sep 2023) vs Jun 2023's 236.47% ⚠️ and 275.88% (Sep 2022) ⚠️ - down sharply on both counts, extending a multi-quarter decline from 2021's series-high above 250% even as gross NPL itself ticked up this quarter.
- Loan at Risk (LAR)» (bank-only, incl. Covid-19 restructuring): 13.87% of total loans (Sep 2023) vs Jun 2023's 15.09% ✅ and 19.28% (Sep 2022) ✅ - continuing the steady improvement despite the same quarter's El Nino-linked NPL pressure. LAR Coverage: 50.66% (Sep 2023) vs 48.63% (Jun 2023) ✅ and 44.90% (Sep 2022) ✅.
- Credit Cost (bank-only, cumulative): 2.47% (9M 2023) vs 2.27% (1H 2023) ⚠️ and 2.88% (9M 2022) ✅ - worse than H1's own reading within the same year, though still better than a year ago, consistent with standalone Q3's impairment jump above.
- BOPO» (Opex/Opr. Income, bank-only): 64.77% (Sep 2023) vs 64.21% (Jun 2023) ⚠️ and 62.59% (Sep 2022) ⚠️ - worse on both counts, extending Q2's first-flagged deterioration into a second straight quarter.
- Cost to Income Ratio (CIR)», bank-only: 37.63% (Sep 2023) vs 38.96% (Jun 2023) ✅ and 38.99% (Sep 2022) ✅ - improved on both counts, comfortably inside BRI's 40.0%-41.5% FY2023 band.
- Cost of Fund (CoF), bank-only: 2.74% (Sep 2023) vs 2.66% (Jun 2023) ⚠️ and 1.73% (Sep 2022) ⚠️ - still climbing on both counts as the higher-for-longer rate environment continues to feed through.
Business Lines: Loan Growth and Credit Quality
YoY, consolidated, per BRI's own investor presentation
Micro loans grew 11.6% YoY, essentially matching Q2's 11.4%. Its NPL worsened to 2.41% from Q2's 2.23% and Sep 2022's 2.12% - deteriorating on both counts, one of the segments management's own El Nino/Covid-unwind commentary points to.
Consumer grew 14.0% YoY, up from Q2's 12.3%. NPL worsened to 2.10% from Q2's 2.02% and Sep 2022's 1.98% - like Micro, worse on both counts this quarter.
Small grew 5.0% YoY, essentially flat with Q2's 5.1% after Q1's sharp recovery. NPL worsened to 4.58% from Q2's 4.29%, though it remains better than Sep 2022's 4.81% - still BRI's single worst-performing core segment by NPL level.
Medium grew 30.1% YoY, accelerating sharply from Q2's already-fast 22.7% and now the fastest-growing segment by a wide margin. Its NPL improved to 2.16% from Q2's 2.70% and Sep 2022's 2.53% - growing fastest and improving fastest at the same time, the cleanest combination of any segment this quarter.
Corporate grew 20.6% YoY, a sharp rebound from Q2's 1.0% - almost a mirror image of last quarter's near-stall. NPL improved to 4.66% from Q2's 4.83%, essentially flat against Sep 2022's 4.64%.
Segment Comparison
Consolidated total loan growth accelerated to 12.5% YoY, well above Q2's 8.8% and now above the very top of BRI's own 10%-12% FY2023 guidance band - a flip from Q1 and Q2's undershoot to an overshoot within the same guidance year (see Beyond the Usual). The segment ranking reshuffled again: Medium kept accelerating to a series-fastest 30.1% YoY, Corporate rebounded sharply from Q2's near-stall to 20.6%, while Micro and Consumer - BRI's two retail engines - both saw NPL worsen on a QoQ and YoY basis simultaneously for the first time this series has recorded together, the clearest sign yet of the El Nino/Covid-restructuring-unwind pressure management names explicitly this quarter landing in the same segments at the same time. Small remains the one segment with genuinely weak growth (5.0% YoY) and the highest NPL level (4.58%) of the five.
Beyond the Usual
This quarter's source documents are BRI's unaudited interim consolidated financial statements as of September 30, 2023 - again the short-form OJK Published Financial Report structure with commitments/contingencies and a ratio table, but no notes to the financial statements beyond that - alongside BRI's 9M23 investor presentation.
BRI's FY2023 Loan-Growth Guidance Flipped From Missing Low to Missing High
[Q1](/analysis/bbri/2023-03/#beyond-the-usual) and [Q2](/analysis/bbri/2023-06/#beyond-the-usual) both showed Loan Growth undershooting BRI's 10%-12% FY2023 guidance band (9.7% and 8.8% respectively). This quarter it came in at 12.5% - above the top of the same, unrevised band - meaning the metric moved from missing low to missing high within a single guidance year rather than settling inside the range management itself set. BRI's own presentation frames this as a strength ("Strong Loan Growth Pickup... surpassed our FY23 target"), not a miss to correct, but it's the same 10%-12% line that was treated as a shortfall two quarters running. NIM told a similar story on the other guidance line that's now persistently overshot: 8.05% against an unchanged 7.7%-7.9% band, up from Jun 2023's 7.85% reading against the same band. NPL, the guidance line that missed all year, still missed even after management widened its own band mid-year from 2.6%-2.8% to 2.8%-3.0% - the actual reading of 3.07% (consolidated) sits above even the revised ceiling. Credit Cost (2.44% against 2.2%-2.4%) and Bank-Only CIR (37.63% against 40.0%-41.5%) remain the two lines comfortably on track.
El Nino Named As A Fresh Driver Behind Rising Micro and Small Segment Stress
BRI's 9M23 presentation states directly, under "Key Challenges," that "in 3Q23 our asset quality was impacted by El Nino that has led to lower rainfall across Indonesia, impacting farmers and fisheries," alongside the separately-named "lingering effect of Covid-19" pushing Special Mention and NPL higher in the micro and small segments as pandemic-era restructuring winds down. This is the first time this series has seen BRI name a weather event as an explicit quarterly earnings driver, and it lands in the same quarter Micro and Consumer NPL both worsened on a QoQ and YoY basis together for the first time (see [Business Lines](#business-lines-loan-growth-and-credit-quality)) - worth watching whether the effect proves a one-quarter blip or extends into Q4, since El Nino conditions typically persist across multiple quarters.
Bank-Only Standalone Profit Fell While the Consolidated Group Figure Still Grew
BRI's bank-only (parent/individual) standalone Q3 net profit, derived the same way as the consolidated figures above (9M individual profit of Rp39,002,857 million minus 1H individual profit of Rp26,265,520 million), works out to roughly Rp12,737,337 million - down about 4.65% from Sep 2022's equivalent standalone bank-only figure of roughly Rp13,358,878 million. The consolidated Group figure, by contrast, grew 1.40% over the same standalone quarter (see Key Financial Metrics). Subsidiaries - Pegadaian, PNM, BRI Life, and the rest of the Ultra Micro Holding and insurance businesses - are increasingly doing the work of keeping Group profit growth positive even as the core bank's own quarterly profit shrank.
Bank-Only CAR Kept Climbing Rather Than Reverting After Q2's Sharp Jump
Bank-only Total CAR rose again to 25.23% (Sep 2023) from Jun 2023's 24.65% - a second consecutive quarterly increase after the single-quarter jump Q2's post flagged. Treasury stock, which held exactly flat between March and June 2023, grew again this quarter to Rp3,283,265 million from Jun 2023's Rp3,019,133 million - a roughly Rp264 billion increase, meaning the buyback resumed spending capital in the same quarter the ratio itself kept climbing rather than reverting.
NPL Coverage Kept Falling Even As the Gross NPL Ratio Ticked Up
Bank-only NPL Coverage fell to 217.69% (Sep 2023) from 236.47% (Jun 2023) and 275.88% (Sep 2022) - a continuation of the multi-quarter decline from 2021's series-high above 250%, now landing in the same quarter gross NPL itself worsened both QoQ and YoY. The combination (coverage falling while the underlying bad-loan ratio rises) is a genuine shift from earlier in this series, when coverage climbing alongside NPL was the more common pattern; the ratio remains well above 100% coverage, so this isn't itself alarming, but it's a trend worth tracking into Q4.
Target Valuation Range
~13.47x P/E, ~2.58x P/B. Bottom line: BRI's valuation discount to BCA widened again on P/E this quarter, reversing Q2's narrowing, while narrowing only modestly on P/B - and neither move reflects a genuine convergence in growth rates, since BRI's own standalone-quarter profit growth (1.40%) badly lagged its own cumulative 9M headline (12.35%) in a way the cumulative figure alone doesn't show.
Annualizing standalone Q3 2023's basic EPS of Rp97 (×4 = Rp388) against BRI's Rp5,225 close on September 29, 2023 (the last trading day of the quarter, down 3.69% from Jun 2023's Rp5,425 close) gives a P/E» of approximately 13.47x - down from Q2's ~14.74x on the same annualized-single-quarter method, since the share price fell this quarter even as the quarter's own EPS ticked up slightly.
Book value per share is approximately Rp2,023 (Rp306,601,224 million total equity attributable to owners ÷ 151,559,001,604 shares outstanding, unchanged since Q3 2021).
| Market cap → book value | Q3 2023 |
|---|---|
| Share price (period-end) | Rp5,225.00 |
| Shares outstanding | 151,559,001,604 |
| Market capitalization | ~Rp791,896B (~$51.24B, using this quarter's disclosed Rp15,455.00/USD rate) |
| Total equity attributable to owners (book value) | Rp306,601B |
| P/B» | ~2.58x |
| Peer-multiple sanity check | Q2 2023 | Q3 2023 | Change |
|---|---|---|---|
| P/E» | ~14.74x | ~13.47x | ✅ down - share price fell even as the quarter's own EPS ticked up slightly |
| P/B» | ~2.80x | ~2.58x | ✅ down - book value per share grew faster than the share price, which fell |
BBCA's own Q3 2023 post reported a trailing-four-quarter P/E of ~22.6x and a P/B of ~4.62x - a gap to BRI's ~13.47x and ~2.58x of roughly 9.13x on P/E and 2.04x on P/B. The P/E gap widened from Q2's ~7.6x, reversing that quarter's narrowing, while the P/B gap narrowed slightly from Q2's ~2.2x. BCA's own 9M 2023 net income grew 25.8% YoY against BRI's 12.35% - BRI continuing to grow at roughly half BCA's pace, extending the widening growth gap H1's post already flagged.
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 That Eased Back This Quarter
BRI's shares closed at Rp5,225 on September 29, 2023, up 35.7% over the trailing two years from Sep 2021's Rp3,850 close (an approximate month-end reading; the exact Sep 30, 2021 close is not separately disclosed here). Shares climbed through 2022 in fits and starts, troughed briefly at Rp4,070 in Jan 2023, then rallied sharply to a window peak of Rp5,650 in Jul 2023, before easing back to Rp5,225 by quarter-end - a peak-to-trough swing of roughly 46.8% across the full two-year window, comfortably past the threshold for a dedicated section here, and a reminder that the stock's strongest run happened well before this specific quarter's weaker earnings mix showed up. 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 September 30, 2023 and for the nine-month period then ended, and its 9M23 investor presentation.