BFIN Two Straight Quarters Without a Cure Rate - Does a Shrinking Restructured Book Still Mean What It Used To?

Record Bookings, a Partial Treasury Move, and a Disclosure Gap That Isn't Closing

Q2 2022's post closed with two open threads: would Trinugraha Capital's stake keep climbing past its newly-crossed 51.38% majority, and would the unconstrained new mandate to dispose of BFI's entire treasury stock actually get used where the narrower, price-locked plan before it hadn't? The 9M 2022 filings answer both, partially. Trinugraha's disclosed stake is unchanged at 51.38% (7,688,125,938 shares, identical to 30 June 2022) - whatever consolidation was going to happen, happened in Q2, and nothing moved further this quarter. The treasury mandate did get exercised, but only its smallest piece: on 11 October 2022, three days after quarter-end, BFI transferred 75,000,000 treasury shares into its Management and Employee Stock Ownership Program at Rp500 per share, effective 13 October with a three-year trading lockup. That leaves 927,732,000 shares - 92.5% of the entire mandate - still sitting untouched, with no on-exchange or off-exchange sale to Trinugraha or any third party disclosed as of this filing.

The number that hasn't moved at all, in either direction, is the one this backlog has tracked longest: the cure rate and second-restructuring share are absent from the financial statements and investor presentation for a second consecutive quarter, following their first disappearance in Q2's filings. The restructured pool itself kept shrinking - to 2.9% of managed receivables from Q2's 4.5%, a fourth straight quarterly contraction - but without the two metrics that used to explain why it was shrinking, a reader is back to guessing whether that's genuine recovery, write-offs, or aging-out. One piece of Q2's disclosure story did partially reverse: the debt-to-equity figure that vanished from the presentation's own Key Ratios slide is still missing there, but it's present in the financial statements themselves, as a Gearing Ratio of 1.20x in the mandatory OJK compliance-ratio note - see Beyond the Usual below for why that distinction matters.

Bookings hit a third consecutive record - Rp13,727 billion for the nine months, Rp5,198 billion in Q3 alone - and net income grew 64.5% YoY to Rp1,309,778M, continuing the same post-pandemic compounding this backlog has tracked since 2020.

The Prescription

Publish the cure rate, or explain in plain terms why it stopped. This is now the sixth straight post in this backlog asking for this specific disclosure, and the ask has gone from "the trend is worrying" to "the trend can no longer be assessed at all." A restructured pool that's shrunk from 10.2% of receivables at FY2021 to 2.9% now, with no cure-rate or second-restructuring data point for the two quarters that took it from 4.5% down to 2.9%, is not a transparency nuance - it's the one number that would tell a reader whether this backlog's central asset-quality question (is BFI's book actually healing, or is troubled debt aging out of a shrinking bucket while remaining troubled) has been answered or simply made unanswerable.

What it should stop doing: treating the treasury-stock mandate as fully "handled" in its own disclosure language once a fraction of it executes. The financial statements correctly show 927,732,000 shares (92.5% of the mandate) still outstanding and untouched, but neither the presentation nor the significant-events note frames this as a mandate that's mostly un-executed three months after shareholders approved an unconstrained plan specifically designed to remove the friction that killed Q1's narrower attempt. If the broader sale to Trinugraha or third parties isn't actually happening, that's worth saying plainly rather than letting the MESOP tranche's small, real move stand in for the whole mandate.

Key Financial Metrics

Nine months ended 30 September 2022 vs. nine months ended 30 September 2021

FX: Rp15,175 = USD 1 (30 September 2022 month-end rate). Both periods below are converted at this same rate for comparability, following the convention used throughout this backlog - it is not a historical rate for the 2021 column.

Metric	9M 2022 (IDR)	9M 2022 (USD)	9M 2021 (IDR)	YoY
Total Income ("Net Revenue" equivalent)	Rp3,847,784M	~$253.6M	Rp2,968,492M	✅ +29.6%
Profit Before Tax ("Operating Income" equivalent)	Rp1,623,916M	~$107.0M	Rp999,688M	✅ +62.4%
Net Income	Rp1,309,778M	~$86.3M	Rp796,012M	✅ +64.5%
Total Cash and Cash Equivalents	Rp1,320,975M	~$87.0M	Rp969,182M*	✅ +36.3%*

*Cash comparison is against 31 December 2021, not a twelve-month-earlier balance - this filing's comparative balance-sheet date is year-end, consistent with the convention used throughout this backlog.

Profit before tax remains the closest operating-income equivalent for this lender, as established throughout this backlog. The company's 9M 2022 investor presentation (dated 27 October 2022) is the source for the management-commentary content below; the financial-statement analysis draws on the company's unaudited consolidated interim financial statements for the nine-month period ended 30 September 2022, with comparative figures for 31 December 2021 and the nine-month period ended 30 September 2021.

Net income's +64.5% YoY growth continues the pattern this backlog has tracked since the pandemic trough, though the pace is easing slightly from H1's +70.1%. Basic earnings per share reached Rp88 for 9M 2022, up from Rp53 a year earlier, on the same unchanged 14,964,383,620 weighted-average shares net of treasury stock. No new dividend was declared this quarter - the Rp17/share 2021 dividend approved at the June AGM was already fully paid out (Rp7 interim in December 2021, Rp10 final on 28 July 2022, as reported last quarter).

Balance sheet metric	30 Sep 2022 (IDR)	30 Sep 2022 (USD)	31 Dec 2021 (IDR)	Change
Total Assets	Rp20,000,618M	~$1,318.0M	Rp15,635,739M	✅ +27.9%
Financing Receivables (gross)	Rp23,101,030M	~$1,522.3M	Rp18,126,473M	✅ +27.4%
Total Liabilities	Rp11,403,717M	~$751.5M	Rp8,205,513M	⚠️ +39.0%
Fund Borrowings (net)	Rp8,708,385M	~$573.9M	Rp4,789,422M	⚠️ +81.8%
Securities Issued (bonds, net)	Rp1,580,829M	~$104.2M	Rp2,487,483M	✅ -36.4%
Total Equity	Rp8,596,901M	~$566.5M	Rp7,430,226M	✅ +15.7%

Debt-to-equity^», on the same gross basis used throughout this backlog (fund borrowings plus securities issued, net, over total equity), rose to ~1.20x from Q2's ~1.11x and Q1's ~0.98x - a third consecutive quarterly increase, still funding record bookings rather than signaling distress. This figure now matches the Gearing Ratio disclosed in the financial statements' own mandatory OJK compliance-ratio note almost exactly (1.20x), a cross-check that wasn't available last quarter without computing it independently - see Beyond the Usual below. The related-party working-capital facility from PT United Tractors Tbk - flagged since Q1 2020 - continued amortizing on its unchanged 27 December 2024 maturity, down to Rp355,334M from Rp393,322M at year-end.

Key Operational Metrics

• New financing originations: Rp13,727 billion for 9M 2022 (Rp5,198 billion in Q3 alone), up 17.5% QoQ from Q2's Rp4,425 billion and up 48.3% YoY from 9M 2021's Rp9,254 billion - the third consecutive record quarterly booking, extending Q2's record into a third straight quarter.
• Managed receivables (including off-balance-sheet joint financing, per the deck): Rp18,372 billion, up 9.4% QoQ from Q2's Rp16,796 billion and up 33.6% YoY.
• Non-Performing Financing (NPF) (company's own disclosed figure^», gross basis): 1.09% at Q3 2022, essentially flat from 1.08% at Q2 2022 - a second consecutive minor quarterly uptick, though still sharply improved from 1.97% a year earlier. NPF coverage eased to 4.2x from Q2's 4.6x, still up from 3.2x YoY, while the loan loss reserve eased to 4.6% of receivables from 5.0% QoQ.
• Net Credit Loss (NCL) ratio (annualized): 0.89% for Q3 2022, up from Q2's 0.53%, though the nine-month cumulative figure improved to 0.81% from 3.23% a year earlier - management attributes the year-over-year improvement to lower net write-offs and gains on repossession.
• Cost of Credit (COC): 0.79% for 9M 2022 (annualized), down sharply from 9M 2021's 1.75%; the Q3-alone figure ticked up slightly to 0.66% from Q2's 0.63%.
• Net Interest Spread: 13.6% for 9M 2022, up from 11.3% a year earlier (13.9% for Q3 alone, up from Q2's 13.7%).
• Cost to Income: 45.9% for 9M 2022, an improvement from 9M 2021's 49.7% (46.0% for Q3 alone, essentially flat from Q2's 46.4%).
• Return on average assets (before tax): 12.4% for 9M 2022, up from 9.2% a year earlier.
• Return on average equity (after tax): 21.7% for 9M 2022, up from 15.4% a year earlier - continuing to build on H1's strongest post-pandemic reading.
• Earnings per share: Rp88 basic for 9M 2022, up from Rp53 a year earlier (see Key Financial Metrics above).

Update on Loan Restructuring

• Restructured balance: Rp524,959M as of 30 September 2022, equal to 2.9% of total managed receivables - down again from Q2 2022's 4.5%, which was itself down from Q1's 6.9% and Q4 2021's 10.2%. This is the fourth consecutive quarterly contraction in the pool.
• Absolute size: the restructured balance nearly halved again in three months, from Rp759,739M at 30 June 2022 to Rp524,959M at 30 September 2022 - down 64.5% from Rp1,479,787M at the start of the year.
• Cure rate and second-restructuring share: still not disclosed. This is the second consecutive quarter without either figure, following their first disappearance from Q2's filings. The last disclosed cure rate remains Q1 2022's 80.7% (its fourth straight quarterly decline at the time), and the last disclosed second-restructuring share remains Q1's 18.0% (its fifth straight increase). See The Prescription above for why the gap matters more, not less, the smaller this pool gets.
• Rescheduling program remains closed since August 2020 - every account still in restructuring is working through relief already granted in 2020, not new Covid-19 volume, per the same disclosure that has held throughout this backlog.

Three Segments, and Others Extends Its Lead as the Fastest Grower

The company reports Cars, Motorcycles, and Others on a nine-month cumulative basis, unchanged from every prior quarter in this backlog.

Cars - still the largest segment: Rp2,608,949M of income (67.8% of total, down slightly from 69.2% a year earlier), with profit before tax up 57.7% YoY to Rp1,141,766M from Rp724,042M - margin (PBT/income) improved to 43.8% from 35.2%, and net profit up 59.7% to Rp920,898M from Rp576,526M.

Motorcycles - Rp791,323M of income (20.6% of total, up from 18.5%), with profit before tax up 62.0% YoY to Rp315,735M from Rp194,846M, margin improving to 39.9% from 35.6%, and net profit up 64.1% to Rp254,658M from Rp155,148M.

Others (heavy equipment/machinery, property, and sharia financing) - Rp447,512M of income (11.6% of total, down slightly from 12.3%), with profit before tax up 106.0% YoY to Rp166,415M from Rp80,800M - again the fastest-growing segment by a wide margin - and net profit up 108.6% to Rp134,222M from Rp64,338M. Margin expanded to 37.2% from 22.1%. H1's post called two consecutive quarters of accelerating Others profit growth "no longer just recovering." A third straight quarter of triple-digit YoY profit growth confirms it: Others has now out-grown both larger segments on a percentage basis every quarter since its reversal was first flagged in Q2 2021, even as its share of total income keeps drifting down in relative terms.

Beyond the Usual

The cure rate has now been missing for two straight quarters, with no explanation offered either time

BFI disclosed a restructuring cure rate and second-restructuring share every quarter from the pandemic's start through Q1 2022, then dropped both from the H1 2022 filings without comment. The 9M 2022 filings repeat the omission - no cure rate, no second-restructuring share, in either the financial statements or the investor presentation, and again with no stated reason. The restructured pool has now shrunk for four consecutive quarters (14.8% at Q3 2021 down to 10.2%, 6.9%, 4.5%, and now 2.9% of managed receivables), and the smaller it gets, the more a single disclosed cure rate would tell a reader about whether that shrinkage is real recovery or something else. Two straight quarters of silence on a metric disclosed without fail for two years reads less like a one-off omission and more like a policy change BFI hasn't announced as one.

Debt-to-equity is missing from the presentation's own Key Ratios slide, but it never actually left the financial statements

BFI's investor presentation dropped its debt-to-equity row from the Key Ratios slide starting with H1 2022, and it's still absent from the 9M 2022 deck. But the financial statements themselves have disclosed an equivalent figure every quarter regardless, as a "Gearing Ratio" in the mandatory OJK compliance-ratio note (Note 37 this quarter) required under POJK No.35/POJK.05/2018 - 1.20x as of 30 September 2022, up from 1.1x at 30 June 2022 and 0.98x at 31 December 2021, tracking almost exactly with this backlog's own independently-computed debt-to-equity figure (see Key Financial Metrics above). The gap, in other words, is specifically in what the presentation chooses to highlight for investors, not in what the audited numbers actually disclose - a narrower finding than last quarter's framing suggested, since the ratio was recoverable from the filed statements all along.

Only the smallest slice of June's treasury-stock mandate has actually moved

The 29 June 2022 EGMS authorized disposing of BFI's entire 1,002,732,000-share treasury stock: up to 927,732,000 shares for sale on or off the exchange to Trinugraha or any third party, plus 75,000,000 shares for the MESOP program. As of 30 September 2022, none of it had moved - the treasury balance was unchanged at 1,002,732,000 shares. The first execution came as a subsequent event: on 11 October 2022, BFI transferred the 75,000,000 MESOP shares at Rp500 per share, effective 13 October with a three-year lockup, cutting the treasury balance to 927,732,000 shares. That's exactly the remainder still earmarked for the broader on/off-exchange sale - none of which has been disclosed as executed yet. Three and a half months after an unconstrained mandate was approved specifically to remove the pricing friction that killed Q1's narrower attempt, 92.5% of the authorized disposal remains just that - authorized, not done.

A new Bank Jago facility, signed at exactly half the size of the one that just lapsed unused

Flagged last quarter as a facility that expired at its own maturity having never been drawn, the Rp300,000M-limit Bank Jago Tbk term loan (originally signed at Rp600,000M in June 2021) matured undrawn on 24 June 2022. Three months later, on 22 September 2022, BFI signed a new bilateral facility with the same bank - also Rp300,000M, maturing 22 September 2025. As of 30 September 2022, eight days after signing, the new facility shows a zero drawn balance, which is unremarkable for a facility that young; whether it gets used where its predecessor never was is worth tracking into next quarter. The separate Bank Jago joint-financing agreement remains modestly active, with Rp4,320M outstanding against its Rp300 billion ceiling.

Trinugraha's stake held exactly flat, confirming Q2's majority crossing was a one-time event, not an ongoing accumulation

Trinugraha Capital & Co SCA's disclosed holding was unchanged at 7,688,125,938 shares (51.38%) between 30 June and 30 September 2022 - the same figure Q2's post reported after the tendered shares landed via the share subscription agreement with Jerry Ng and Garibaldi Thohir. Nothing in this quarter's filings suggests any further stake movement in either direction. Combined with an unchanged shareholder table otherwise (no substantial holder besides Trinugraha above 5%), the ownership structure that consolidated in Q2 appears to have settled rather than continuing to shift.

Management's Reading of Its Own Quarter

The 27 October 2022 presentation leads with "9M22 booking was Rp13,727 bn... our highest quarterly booking yet," framing the quarter almost entirely around growth, receivables expansion, and continued asset-quality metrics cited YoY - the same growth-first framing H1's post found. The one governance-adjacent item on the "Other" slide is a single bullet on the treasury/MESOP approval and its October execution price - no mention of the 927,732,000 shares still unsold, and, consistent with the last two quarters, no mention of ownership or board composition at all, since nothing changed there this quarter to report. Unlike Q2, where a real governance event went unmentioned in the deck, this quarter's silence on governance simply reflects that there was no new governance event to discuss - the more consequential omission this quarter is the cure rate, which the deck also doesn't address (see Beyond the Usual above).

Stock Price: A Modest Recovery Inside a Much Larger Swing

BFI Finance shares closed at Rp1,150 on 30 September 2022, up 5.0% from Q2's Rp1,095 - a partial recovery after that quarter's first decline in over a year, though still below April's Rp1,285. Over the trailing two-year window (October 2020 through September 2022), the stock ranged from Rp382 (November 2020) to Rp1,305 (January 2022), a 241.6% peak-to-trough swing - well past the >30-40% threshold applied throughout this backlog, though the underlying move happened well before this particular quarter. The quarter's own price action was comparatively uneventful: a modest bounce off Q2's low, in a business quarter that was anything but uneventful operationally.

Target Valuation Range

Market cap ~Rp17,209,041M (~$1,134.0M) at ~10.5x TTM P/E and ~2.00x P/B - BFI is slightly cheaper on a trailing-earnings basis than it was three months ago, even after a 5% price recovery - earnings simply grew faster than the stock did, for the third straight quarter running.

Using 14,964,383,620 weighted-average shares outstanding net of treasury stock (unchanged since December 2019) and the Rp1,150 closing price:

Market cap buildup	Q3 2022
Share price (period-end)	Rp1,150
Shares outstanding	14,964,383,620
Market capitalization	Rp17,209,041M (~$1,134.0M)
Book value (total equity)	Rp8,596,901M

Peer-multiple sanity check	Q2 2022	Q3 2022	Change
P/E (TTM)	~11.1x	~10.5x	down slightly
P/B	~2.02x	~2.00x	down slightly

Market cap is up 5.0% from Q2's ~Rp16,386,000M. TTM P/E uses TTM net income of Rp1,645,104M (FY2021's Rp1,131,338M, less 9M 2021's Rp796,012M, plus 9M 2022's Rp1,309,778M). TTM net income grew 11.7% quarter-over-quarter (Q2's TTM was Rp1,472,837M) while the stock gained only 5.0% - the same pattern this backlog flagged in Q1 and Q2, just with the price moving in the opposite direction this time. Stock price is like mood: it can change anytime, and what matters is how the business actually performs - and on that measure, three straight quarters of record bookings and compounding profitability continue to outrun the market's own re-rating of the stock.

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