A Record-Low "Net" Credit Cost Built on Recoveries, Not a Cleaner Loan Book
BRI's FY2023 headline reads clean: consolidated Net Interest and Net Premium Income, net, grew to Rp137,344,879 million for the year ended December 31, 2023 (+8.86% YoY from FY2022's Rp126,174,396 million), and net income attributable to owners grew 17.45% YoY to Rp60,099,863 million. Management's own framing goes further - BRI's FY23 presentation states that "gross cost of credit is managed within guidance and we posted below 1% net cost of credit at 0.99% due to strong recovery income (Rp16.8tn) in FY23," a metric distinct from the bank-only Credit Cost of 2.38% that BRI's own guidance table actually tracks (see Beyond the Usual).
Isolating standalone Q4 2023 - FY2023 minus 9M2023, the same subtraction method every prior Q4 post in this series has used - shows a quarter that doesn't fully square with the "credit quality is fine, recoveries just flattered the number" framing. Standalone Q4 Net Interest and Net Premium Income grew a healthy 19.05% YoY to Rp34,329,472 million, and standalone Q4 net income attributable to owners grew 34.07% YoY to Rp16,107,256 million from Rp12,014,079 million a year earlier - both genuinely strong. But standalone Q4 impairment for financial assets jumped 127.93% YoY, to Rp6,286,447 million from Rp2,757,990 million in Q4 2022 - more than double, on a gross basis, in the same quarter management's full-year materials lead with the metric net of recoveries. The Rp16.8 trillion of recoveries (per the cash flow statement's "Recoveries of written-off assets" line, up from FY2022's Rp12,468,321 million) is real and cash-generative, but it's a distinct number from the provision charge actually taken against the loan book that quarter - and a reader relying only on "net cost of credit: 0.99%" wouldn't see that the gross charge itself more than doubled YoY in Q4 alone.
The Prescription
BRI should present "net cost of credit" and "gross Credit Cost" side by side in the same table whenever it uses the net framing publicly, rather than leading with the flattering net number in the strengths section while the guidance-tracked gross Credit Cost sits in a different part of the deck. The two numbers answer different questions - one is what the bank is actually setting aside against new impairment this period, the other is what it's getting back on loans it already wrote off - and conflating them (even unintentionally, by proximity) makes a quarter with a sharply higher gross provision charge read as a quarter where credit quality broadly improved.
What BRI should keep doing: all five of its FY2023 guidance lines landed In Line or Beat for the first time in this series' guidance-tracking history (see Beyond the Usual) - a genuine improvement over 9M's mix of misses. BRI should extend that discipline into how it frames FY2024's now-narrower guidance bands (NIM 7.9%-8.0%, Credit Cost 2.2%-2.3%), rather than let a strong headline year loosen the rigor with which it reports against its own targets next.
Key Financial Metrics
Year ended December 31, 2023 vs. year ended December 31, 2022 (consolidated), unless noted
FX: Rp15,397.00 = USD 1 as of December 31, 2023, per BRI's own filed financial statements' disclosure - a 1.10% Rupiah appreciation from Dec 2022's Rp15,567.50 and a 0.38% appreciation from Sep 2023's Rp15,455.00.
| Metric | FY2023 (IDR) | FY2023 (USD) | FY2022 (IDR) | YoY |
|---|---|---|---|---|
| Net Interest and Net Premium Income, net ("Net Revenue" equivalent) | Rp137,344,879M | ~$8,919M | Rp126,174,396M | ✅ +8.86% |
| Operating Income (Profit from Operations) | Rp76,835,065M | ~$4,990M | Rp64,416,379M | ✅ +19.28% |
| Net Income (attributable to owners) | Rp60,099,863M | ~$3,902M | Rp51,170,312M | ✅ +17.45% |
| Net Income (total consolidated, incl. non-controlling interests) | Rp60,425,048M | ~$3,923M | Rp51,408,207M | ✅ +17.54% |
| EPS (basic, attributable to owners, full-year) | Rp398 | ~$0.0258 | Rp338 | ✅ +17.75% |
| Impairment for financial assets | Rp29,523,426M | ~$1,918M | Rp27,384,906M | ⚠️ +7.81% (higher is worse) |
Standalone Q4 2023 (FY2023 minus 9M 2023), vs. standalone Q4 2022
| Metric | Q4 2023 (IDR) | Q4 2022 (IDR) | YoY |
|---|---|---|---|
| Net Interest and Net Premium Income, net | Rp34,329,472M | Rp28,836,698M | ✅ +19.05% |
| Operating Income (Profit from Operations) | Rp20,625,945M | Rp15,542,316M | ✅ +32.72% |
| Net Income (attributable to owners) | Rp16,107,256M | Rp12,014,079M | ✅ +34.07% |
| Impairment for financial assets | Rp6,286,447M | Rp2,757,990M | ⚠️ +127.93% (higher is worse, see above) |
| Balance sheet metric | Dec 2023 (IDR) | Dec 2023 (USD) | Dec 2022 (IDR) | vs. Dec 2022 |
|---|---|---|---|---|
| Total Assets | Rp1,965,007B | ~$127,626M | Rp1,865,639B | ✅ +5.33% |
| Total Loan & Financing (gross, incl. subsidiaries) | Rp1,266,429B | ~$82,257M | Rp1,139,077B | ✅ +11.18% |
| Total Deposits (Third Party Funds) | Rp1,358,329B | ~$88,221M | Rp1,307,884B | ✅ +3.86% |
| Total Equity (incl. non-controlling interest) | Rp316,472B | ~$20,554M | Rp303,395B | ✅ +4.31% |
| Total Cash and Cash Equivalents (per cash flow statement, period-end) | Rp218,678B | ~$14,204M | Rp268,192B | ⚠️ -18.46% |
Cash fell as strong loan growth (see above) and a Rp43,494,766M dividend distribution during 2023 (up from FY2022's Rp26,406,603M, reflecting FY2022's larger payout base) drew down liquid balances rather than reflecting a stress event. Book value per share is discussed in Target Valuation Range below.
Key Operational Metrics
Bank-only, per BRI's own filed financial-ratio table and investor presentation, unless stated
- CASA»: 64.55% (Dec 2023) vs Sep 2023's 63.81% ✅ and 66.92% (Dec 2022) ⚠️ - up QoQ but still below a year ago, essentially flat for the year per management's own "CASA growth was flat in 2023" framing.
- Loan-to-Deposit Ratio (LDR)»: 84.73% (Dec 2023) vs Sep 2023's 88.34% ✅ and 79.17% (Dec 2022) ⚠️ - down sharply QoQ as deposit growth outpaced loans this quarter, still above a year ago.
- Net Interest Margin (NIM), bank-only: 6.84% (Dec 2023) vs Sep 2023's 6.97% ⚠️ and 6.80% (Dec 2022) ✅ - a modest QoQ dip, still up for the year. On BRI's own consolidated guidance basis, NIM» closed at 7.95%, above the 7.7%-7.9% FY2023 band for a full year running (see Beyond the Usual).
- ROA» (after tax, bank-only): 3.12% (Dec 2023) vs 3.09% (Sep 2023) ✅ and 3.03% (Dec 2022) ✅ - up on both counts.
- ROE» (book value, bank-only): 18.25% (Dec 2023) vs 18.06% (Sep 2023) ✅ and 16.76% (Dec 2022) ✅ - up on both counts.
- CAR» (Total, bank-only): 25.23% (Dec 2023), flat QoQ from Sep 2023's 25.23% and up from Dec 2022's 23.30% ✅ - capital held its ground through Q4 rather than reversing, unlike Q4 2022's giveback. Tier 1 CAR: 24.28% (Dec 2023, per the filed ratio table's implied split) vs 24.06% (Sep 2023) and 22.30% (Dec 2022).
- NPL ratio - gross (bank-only): 3.12% (Dec 2023) vs Sep 2023's 3.23% ✅ and 2.82% (Dec 2022) ⚠️ - improved QoQ but still worse than a year ago. NPL ratio - net: 0.76% (Dec 2023) vs 0.73% (Sep 2023) ⚠️ and 0.73% (Dec 2022) ⚠️ - the one asset-quality line that ticked up on both counts, even as gross NPL improved QoQ.
- NPL Coverage Ratio (bank-only): 215.27% (Dec 2023) vs Sep 2023's 217.69% ⚠️ and 291.54% (Dec 2022) ⚠️ - a sixth straight quarter of decline from 2022's series-high, continuing well below where it sat a year ago even as gross NPL itself improved this quarter.
- Loan at Risk (LAR)» (bank-only, incl. Covid-19 restructuring): 12.54% of total loans (Dec 2023) vs Sep 2023's 13.87% ✅ and 17.11% (Dec 2022) ✅ - continuing the steady multi-year improvement. LAR Coverage: 53.59% (Dec 2023) vs 50.66% (Sep 2023) ✅ and 48.00% (Dec 2022) ✅ - a new series high.
- Credit Cost (bank-only): 2.38% (FY2023) vs 2.47% (9M 2023) ✅ and 2.47% (FY2022) ✅ - improved on both counts, and the metric BRI's own guidance table actually tracks (see Beyond the Usual for how this differs from the "net cost of credit" figure management otherwise highlights).
- BOPO» (Opex/Opr. Income, bank-only): 64.35% (FY2023) vs 64.20% (FY2022) ⚠️ and comparable to 9M's 64.77% ✅ - essentially flat YoY, improved from the 9M mark as Q4's own ratio came in stronger.
- Cost to Income Ratio (CIR)», bank-only: 37.74% (FY2023) vs 41.95% (FY2022) ✅ and 9M's 37.63% - a large YoY improvement, comfortably inside BRI's 40.0%-41.5% FY2023 band and now beating it outright.
- Cost of Fund (CoF), bank-only: 2.91% (FY2023) vs 2.74% (9M 2023) ⚠️ and 1.87% (FY2022) ⚠️ - still climbing on both counts as the higher-for-longer rate environment continued through year-end.
Business Lines: Loan Growth and Credit Quality
Consolidated, YoY, per BRI's own investor presentation - the same five-way Micro/Consumer/Small/Medium/Corporate scale used since [9M 2023](/analysis/bbri/2023-09/#business-lines-loan-growth-and-credit-quality)
Micro loans grew 10.9% YoY for the full year, a slight deceleration from 9M's 11.6%. Its NPL worsened to 2.47% from 9M's 2.41% and FY2022's 1.74% - deteriorating further, consistent with management's own "El Nino and low government spending" commentary continuing to weigh on this segment through year-end.
Consumer grew 13.4% YoY, decelerating from 9M's 14.0%. NPL actually improved to 1.97% from 9M's 2.10%, though it's still above FY2022's 1.83% - the one segment whose credit quality turned the right direction quarter-over-quarter even as its growth slowed.
Small grew 5.8% YoY, accelerating from 9M's 5.0%. NPL worsened to 4.88% from 9M's 4.58% and FY2022's 4.30% - still BRI's single worst-performing core segment by NPL level, and the gap widened further this quarter.
Medium grew 30.5% YoY, essentially matching 9M's already-fast 30.1% and remaining the fastest-growing segment by a wide margin. NPL worsened to 2.56% from 9M's 2.16%, though it's still better than FY2022's 2.26% - the rapid growth came with some credit-quality give-back this quarter.
Corporate grew 13.8% YoY, a sharp deceleration from 9M's 20.6% - Corporate did most of its 2023 growing earlier in the year. NPL improved to 3.86% from 9M's 4.66% and FY2022's 4.68% - the segment's own income-statement recovery (see Beyond the Usual) tracks with this NPL improvement.
Segment Comparison
Consolidated total loan growth (loans plus Sharia financing and finance receivables) came in at 11.2% YoY, landing inside BRI's own 10%-12% FY2023 guidance band after 9M's overshoot above it - the full year settled back inside the range rather than closing the year on the high side. Medium remained the standout grower (30.5%) with a modest NPL give-back, while Corporate decelerated sharply in Q4 alone (20.6%→13.8% YoY) even as its own NPL improved the most of any segment. Micro and Small both saw NPL worsen further for the full year, the two segments management's own commentary ties most directly to El Nino and the Covid-restructuring unwind, while Consumer was the only segment to improve NPL quarter-over-quarter despite decelerating growth - a genuinely mixed picture across the five segments rather than a uniform trend in either direction.
Beyond the Usual
This quarter's source documents are BRI's audited FY2023 annual report and consolidated financial statements (with full notes) alongside its FY2023 investor presentation.
Management's Own "Net Cost of Credit" Isn't the Number BRI's Guidance Actually Tracks
BRI's FY23 presentation states it "posted below 1% net cost of credit at 0.99% due to strong recovery income (Rp16.8tn) in FY23," positioning this as a key strength. But the Credit Cost line BRI's own guidance table tracks - and the one it reports "In Line" against a 2.2%-2.4% FY2023 band - is 2.38%, a gross figure that doesn't net out recoveries. The cash flow statement confirms recoveries of written-off assets reached Rp16,833,578 million in FY2023, up from Rp12,468,321 million in FY2022, a real and separately-disclosed cash inflow. The two numbers aren't inconsistent with each other, but presenting the flattering net figure as a headline strength while the guidance-tracked gross figure sits elsewhere in the same deck risks a reader conflating "provisioning eased" with "recoveries were unusually large this year" - especially in the same quarter standalone Q4's own gross impairment charge jumped 127.93% YoY (see above).
All Five FY2023 Guidance Lines Landed In Line or Beat for the First Time in This Series
BRI's FY2023 investor presentation reports final-year actuals against all five guidance lines: Loan Growth 11.2% against a 10%-12% band (In Line), NIM 7.95% against 7.7%-7.9% (Beat), Credit Cost 2.38% against 2.2%-2.4% (In Line), NPL 2.95% against 2.8%-3.0% (In Line), and CIR 37.74% bank-only / 41.89% consolidated against 40.0%-41.5% (Beat) - a clean sweep, versus 9M's mixed picture where Loan Growth had just flipped from missing low to missing high and NPL was still missing even a mid-year-widened band. The NPL line in particular moved from a miss at 9M (3.07% against a widened 2.8%-3.0% band) to "In Line" at 2.95% by year-end - a genuine Q4 improvement, not just a favorable restatement of the band itself. FY2024 guidance narrows several of these ranges (NIM to 7.9%-8.0%, Credit Cost to 2.2%-2.3%, NPL to 2.7%-2.9%), effectively raising the bar against which next year's actuals will be judged.
The Corporate Segment's Profit Turnaround Was Substantially a Provision Recovery, Not Revenue Growth
The audited segment footnote (Micro/Retail/Corporate/Others/Subsidiaries - a different five-way split than the presentation's business-line scale used above) shows the Corporate segment's income before tax jumping to Rp14,767,195 million in FY2023 from just Rp1,302,196 million in FY2022 - more than a tenfold increase. But the segment's "Provision for impairment losses" line moved from a Rp1,292,897 million net addback in FY2022 to a Rp7,888,285 million net addback in FY2023 - meaning Corporate segment provisioning released more than it charged in both years, and released substantially more in FY2023. Corporate's own interest and premium income, net, actually stayed modest (Rp3,999,095 million in FY2023 versus a negative Rp1,777,679 million in FY2022, since Corporate carries high funding costs against relatively thin net interest margin). The segment's dramatic profit turnaround is real, but it's a provisioning-release story more than a core-income growth story - consistent with the recovery-income dynamic flagged above, concentrated in this one segment.
Related-Party Asset Concentration Kept Shrinking, Extending a Multi-Year Trend
The annual report's related-party transactions note shows total related-party assets fell to 17.02% of total consolidated assets at Dec 2023, down from Dec 2022's 19.85% (itself down from Dec 2021's 24.22%) - a third straight year of decline, driven mainly by related-party securities holdings falling from 15.35% to 13.06% of total assets. Related-party liabilities stayed essentially flat as a share of the balance sheet (22.24% versus 22.58% a year earlier), unlike the sharp CASA-driven jump FY2022's post found on the liability side that year. This is genuinely interesting context about how much of BRI's balance sheet sits with government-linked counterparties, not a criticism of the bank.
A New Multi-Year IT Procurement Commitment Functions Like a Take-or-Pay Obligation
The significant-agreements footnote discloses a June 2023 agreement with PT Bringin Inti Teknologi for CRM system procurement across three zones, running 60 months at a contract value of Rp999,926 million - the largest of ten disclosed technology and infrastructure procurement agreements signed in 2022-2023, most running 22-60 months. None of these appear as a liability on the balance sheet; they're fixed future obligations disclosed only in this footnote, functioning economically like a multi-year lease or supply commitment even though they're framed as IT service contracts.
Stock Price: A New Two-Year High to Close the Year
BRI's shares closed at Rp5,725.00 on December 29, 2023 (the last trading day of the year), up 9.57% QoQ from Sep 2023's Rp5,225.00 close and 15.89% YoY from Dec 2022's Rp4,940.00. Over the trailing two years (January 2022-December 2023), the stock ranged from a trough of Rp4,070.00 in January 2022 to a peak of Rp5,725.00 - this quarter's own close, a new two-year high - a ~40.7% trough-to-peak gain across the window. BRI hasn't split its stock since 2017, so every price referenced here is directly comparable to prior quarters' own figures with no adjustment needed. This is a large enough two-year move to warrant its own section: the climb tracks the broader recovery and re-rating of Indonesian banks through 2022's rate-hiking cycle into 2023's stabilization, with the year's own strong Q4 (see above) coinciding with the final leg of the two-year climb.
Target Valuation Range
~14.39x P/E, ~2.79x P/B. Bottom line: BRI's full-year profit growth (17.45%) closed much closer to BCA's (19.7%) than at any point earlier in this series, and BRI's valuation discount to BCA narrowed on both P/E and P/B this quarter - a genuine convergence, not just a favorable base effect, since it's built on BRI's own standalone Q4 profit growing 34.07% YoY.
FY2023's basic EPS of Rp398 against the Rp5,725.00 close gives a P/E» of approximately 14.39x - down slightly from FY2022's ~14.62x, as the full-year EPS grew faster than the share price did.
Book value per share is approximately Rp2,054 (Rp311,363,556 million total equity attributable to owners ÷ 151,559,001,604 shares outstanding, unchanged since Q3 2021).
| Market cap → book value | FY2023 |
|---|---|
| Share price (period-end) | Rp5,725.00 |
| Shares outstanding | 151,559,001,604 |
| Market capitalization | ~Rp867,675B (~$56.35B, using this quarter's disclosed Rp15,397.00/USD rate) |
| Total equity attributable to owners (book value) | Rp311,364B |
| P/B» | ~2.79x |
| Peer-multiple sanity check | FY2022 | FY2023 | Change |
|---|---|---|---|
| P/E» | ~14.62x (full-year) | ~14.39x (full-year) | ✅ down slightly - full-year EPS grew faster than the share price did |
| P/B» | ~2.50x | ~2.79x | ⚠️ up - share-price gain outran book-value growth this year |
BBCA's own FY2023 post reported a full-year P/E of ~23.80x and a P/B of ~4.78x, using the same methodology - a gap to BRI's ~14.39x and ~2.79x of roughly 9.41x on P/E and 1.99x on P/B. The P/E gap narrowed meaningfully from FY2022's ~11.3x, and the P/B gap narrowed further from FY2022's ~2.27x, extending 9M's first-recorded P/B narrowing even as that quarter's P/E gap had widened. BRI's own full-year net income attributable to owners grew 17.45% YoY versus BCA's 19.7% - the closest these two growth rates have run in this series, a real convergence rather than the roughly-half-BCA's-pace gap 9M's post flagged, driven by BRI's own strong standalone Q4.
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 audited consolidated financial statements as of December 31, 2023 and for the year then ended, its unaudited OJK-format published financial report for the same period, and its FY2023 investor presentation.