A Governance Story Finally Closes While a Credit Story Just Opened
Q1 2025's post closed on a genuine puzzle: the 927,732,000 treasury shares shareholders had approved for sale back in 2022 - to Trinugraha Capital or third parties, with a 5 November 2025 deadline - suddenly showed up on an AGM agenda as a cancellation instead, six months before that deadline and with no explanation for the change of mechanism. This quarter answers the question. Shareholders approved the cancellation at the 8 May 2025 EGMS, BFI executed a formal Capital Reduction under Indonesia's Companies Law, and the Ministry of Law issued its approval on 14 July 2025 - after the 30 June period-end but before this filing, recorded as a subsequent event. The shares are gone, not sold; BFI's issued capital will shrink by 5.81% once the reduction is formally gazetted. Three years of this backlog tracking a stalled 2022 mandate ends not with the sale shareholders originally authorized, but with permanent retirement - a different outcome than promised, but one that actually happened, which is more than the mandate itself had managed in three years.
While that overhang was closing, a new one may be opening on the credit side. NPF (gross) rose to 1.63% at 30 June 2025 - up 16 basis points year-over-year from June 2024's 1.47%, and up 33 basis points quarter-over-quarter from Q1's 1.30%. Per the company's own five-year trend chart (2021 through 1H25), this is the highest half-year NPF reading in that entire window, surpassing even 2023's 1.36% full-year figure. Cost of Credit for the half rose to 4.7%, up 64 basis points year-over-year from H1 2024's 4.0%, with the deterioration accelerating within the half - Q2 alone ran at 4.9%, up from Q1's already-elevated 4.4%. The company's own presentation attributes this to "additional provision for impairment losses for financing and Sharia receivables, and loss on repossessed assets," the same generic attribution used at every prior turning point in this backlog, again without a segment-level breakdown (see The Prescription below).
Yet net income still rose 11.1% year-over-year to Rp762,224M, continuing the pattern Q1 2025 already established where profitability and credit-quality ratios move in opposite directions. See Key Financial Metrics for the full reconciliation and Three Segments, One Quarter Apart for how unevenly the quarter's profit actually landed once H1's cumulative blend is broken back into its Q1 and Q2 halves.
The Prescription
BFI should start publishing Cost of Credit and NPF by segment, not just in aggregate - a request this backlog has now made in every quarter since 9M 2023, and the case for it has only strengthened. This quarter's aggregate CoC jump could be concentrated in one segment (plausible, since Others' profit before tax swung from growth in Q1 to an estimated 41% year-over-year decline in Q2 alone) or spread more evenly across the book - and a reader genuinely cannot tell which from what BFI discloses. Segment-level provisioning data would resolve in one table what currently requires inference from a segment P&L note that wasn't designed to answer this question.
What BFI should stop doing: treating major governance decisions as one-line deck bullets instead of standalone disclosures with their own rationale. The treasury-share cancellation closes a real overhang, and closing it is the right outcome - but a shareholder base that voted for a sale to a related party in 2022 deserved a clearer public explanation of why cancellation replaced that mechanism, beyond what surfaced piecemeal across two quarters' worth of deck bullets and an EGMS notice. The underlying decision was sound; the sequence in which shareholders learned about it wasn't.
Key Financial Metrics
Six months ended 30 June 2025 vs. six months ended 30 June 2024
FX: Rp16,230 = USD 1 (30 June 2025 close, the period-end date), following the convention used throughout this backlog.
| Metric | H1 2025 (IDR) | H1 2025 (USD) | H1 2024 (IDR) | YoY |
|---|---|---|---|---|
| Total Income ("Net Revenue" equivalent) | Rp3,301,847M | ~$203.4M | Rp3,108,662M | ✅ +6.2% |
| Profit Before Tax ("Operating Income" equivalent) | Rp940,976M | ~$58.0M | Rp844,539M | ✅ +11.4% |
| Net Income | Rp762,224M | ~$47.0M | Rp685,796M | ✅ +11.1% |
| Total Cash and Cash Equivalents | Rp1,254,149M | ~$77.3M | Rp1,739,952M | ⚠️ -27.9% |
Profit before tax remains the closest operating-income equivalent for this lender, as established throughout this backlog. Basic earnings per share rose to Rp51 for H1 2025 from Rp46 a year earlier (+10.9%). Operating cash flow compressed sharply, falling to Rp112,152M from Rp332,822M a year earlier, as cash disbursed for new financing transactions (Rp11,336,412M) grew faster than cash received from financing collections (Rp12,408,938M) and joint-financing receipts (Rp1,419,782M) could offset; investing outflow widened modestly to Rp59,055M. Total cash fell 27.9% year-over-year to Rp1,254,149M and 1.8% quarter-over-quarter from Q1's Rp1,276,978M, continuing the multi-year decline this backlog has tracked since 2021's post-bond-issuance peak.
New bookings grew 19.9% year-over-year to Rp10,895 billion for the half, while Total Income grew just 6.2% over the same period - a similar gap to Q1's own 23.6%-versus-6.8% divergence, and, as established there, the ordinary lag of an installment lender's business model rather than a misdirection, since new bookings convert to income over the life of each loan rather than immediately. What's new this quarter is that the half-year bookings growth hides a sharp deceleration within it: Q2 2025 bookings alone fell 15.7% quarter-over-quarter to Rp4,983 billion, down from Q1's Rp5,912 billion, which the company's own presentation attributes to "lower business productivity in 2Q and more volatile market conditions." A reader looking only at the 19.9% headline would miss that the growth is entirely a Q1 phenomenon.
| Balance sheet metric | 30 Jun 2025 (IDR) | 30 Jun 2025 (USD) | 31 Dec 2024 (IDR) | YoY (Jun 2024) |
|---|---|---|---|---|
| Total Assets | Rp25,336,990M | ~$1,561.2M | Rp25,119,820M | ✅ +4.3% |
| Financing Receivables (net) | Rp22,452,588M | ~$1,383.6M | Rp22,012,814M | ✅ +7.5% |
| Total Liabilities | Rp14,820,634M | ~$913.2M | Rp14,938,155M | n/a |
| Fund Borrowings (net) | Rp10,477,761M | ~$645.6M | Rp10,822,571M | ⚠️ +1.1% |
| Securities Issued (bonds, net) | Rp3,322,114M | ~$204.7M | Rp2,935,877M | n/a |
| Total Equity | Rp10,516,356M | ~$648.0M | Rp10,181,665M | ✅ +8.7% |
Debt-to-equity» (fund borrowings plus bonds, over equity, following this backlog's convention) held roughly flat at 1.31x, against Q1's own ~1.30x and FY2024's 1.35x - the multi-quarter de-leveraging this backlog first flagged reversing at 9M 2024 and resuming at Q1 2025 has essentially paused rather than continued or reversed this quarter. Including the off-balance-sheet joint-financing balance, the company's own "proforma debt" figure of Rp15,889 billion is 11.3% above last year's Rp14,279 billion - growing faster than on-balance-sheet debt because the Bank Jago joint-financing book itself is expanding (see Beyond the Usual below). The related-party PT United Tractors Tbk facility - flagged since Q1 2020 - kept amortizing on schedule, its drawn balance falling to Rp229,727M from FY2024's Rp311,544M (-26.3%), against an unchanged Rp1,250,000M limit.
Key Operational Metrics
- New financing originations: Rp10,895 billion for H1 2025 (excluding Pinjam Modal channeling), up 19.9% year-over-year from H1 2024's Rp9,089 billion; Q2 alone fell 15.7% quarter-over-quarter to Rp4,983 billion from Q1's Rp5,912 billion (see Key Financial Metrics above).
- Managed receivables (including off-balance-sheet joint financing, per the deck): Rp25,627 billion at period-end, up 14.2% year-over-year and 0.9% quarter-over-quarter from Q1's Rp25,406 billion.
- Non-Performing Financing (NPF) (company's own disclosed figure», gross basis): 1.63% for H1 2025, up 16 basis points year-over-year from 1.47%, and up 33 basis points quarter-over-quarter from Q1's 1.30% - the highest half-year reading in the company's own five-year (2021-1H25) trend disclosure. Net NPF stood at 0.30%. NPF coverage fell to 2.4x, down from 2.6x a year earlier and 2.8x last quarter.
- Cost of Credit (CoC): 4.7% for H1 2025, up 64 basis points year-over-year from H1 2024's 4.0%; Q2 2025 alone ran at 4.9%, up 49 basis points quarter-over-quarter from Q1's 4.4% - the deterioration accelerated rather than stabilized within the half, with the company's presentation again attributing it to additional provisioning and loss on repossessed assets, without segment-level detail.
- Net Interest Spread: 11.6% for H1 2025, down 37bps from H1 2024's 12.0%; Q2 alone was 11.5%, down 29bps from Q1's 11.8% - a continuation of the multi-year compression this backlog has tracked.
- Cost to Income: 42.8% for H1 2025, down 502bps from H1 2024's 47.8% - a genuine full-year-comparable improvement, though Q2 alone (43.0%) actually ticked up 28bps from Q1's 42.7%, a small reversal within an otherwise improving trend.
- Return on average assets (after tax): 6.1% for H1 2025, up 37bps from H1 2024's 5.7%; Q2 alone was 5.7%, down 83bps from Q1's 6.5%.
- Return on average equity (after tax): 14.5% for H1 2025, up 37bps from H1 2024's 14.1%; Q2 alone was 13.5%, down 199bps from Q1's 15.5%.
- Earnings per share: Rp51 basic for H1 2025, up from Rp46 a year earlier (see Key Financial Metrics above).
The same pattern Q1 2025 first flagged holds for the full half: every year-over-year profitability ratio (Cost to Income, ROAA, ROAE) improved, while both credit-quality ratios (NPF, Cost of Credit) worsened. But the quarter-over-quarter breakdown shows the profitability side losing some of its own momentum too - ROAA, ROAE, and Cost to Income all moved in the worse direction from Q1 to Q2, even though the year-over-year comparison still looks favorable. Q2 is not a seasonally distinct quarter for BFI's core financing business the way a retailer's holiday quarter is, so this sequential softening reads as a genuine (if modest) loss of momentum rather than a seasonal artifact.
Three Segments, One Quarter Apart
The company reports Cars, Motorcycles, and Others on the same basis as every prior period in this backlog.
Cars - still the largest segment: Rp2,248,915M of income for H1 2025 (68.1% of total, roughly flat from H1 2024's 67.8%), up 6.7% year-over-year, with profit before tax rising 18.9% YoY to Rp637,089M from Rp535,880M and margin improving to 28.3% from 25.4%.
Motorcycles - Rp500,683M of income (15.2% of total, down from H1 2024's 16.1%), essentially flat year-over-year (+0.1%) as the book keeps shrinking in relative terms - but profit before tax rose 13.9% YoY to Rp183,145M from Rp160,723M, with margin improving to 36.6% from 32.1%.
Others (heavy equipment/machinery, property, and Sharia financing) - Rp552,249M of income (16.7% of total, up from H1 2024's 16.1%), up 10.2% YoY - but profit before tax fell 18.4% YoY to Rp120,742M from Rp147,936M, with margin compressing sharply to 21.9% from 29.5%. This is the segment Q1 2025 flagged as one to watch after its own margin compressed even while Q1's profit still grew - that early warning played out. Backing out Q1's own segment figures from these H1 totals: Others' profit before tax for Q2 alone was approximately Rp42,903M, down roughly 41% year-over-year from Q2 2024's approximate Rp72,810M - a much sharper standalone decline than the H1 cumulative -18.4% suggests, because Q1 2025's own 3.6% YoY growth in the segment was still cushioning the half-year average. The same math shows Cars accelerating in Q2 alone (+27.8% YoY) while Motorcycles roughly held steady (+4.1% YoY) - so the segment that was growing fastest a quarter ago (Motorcycles) has cooled, while the segment that's now struggling most (Others) wasn't the one flagged as strongest a quarter ago either. The picture keeps rotating quarter to quarter rather than settling into one durable growth leader.
All three segments posting simultaneous year-over-year profit growth, the genuine first for this backlog that Q1 2025 recorded, did not survive into Q2 - Others' standalone reversal is the reason the H1 cumulative figure understates how much the picture actually changed within the half.
Beyond the Usual
The restructured-loan balance stays missing for a fifth straight filing
H1 2024 removed the restructured-loan balance from the financing-receivables note, and neither 9M 2024, FY2024, nor Q1 2025 restored it. This quarter's financing-receivables note - covering gross receivables, unearned income, staging by credit-risk tier, and aging buckets - still carries no line item for restructured loans. The gap has now held for five consecutive filings, spanning four interim reports and a full annual report, through a period in which both NPF and Cost of Credit have moved to their worst readings in the disclosed multi-year trend.
The 927,732,000-share treasury overhang was cancelled, not sold, closing a three-year mandate
The shares remained entirely unmoved through Q1 2025, and that quarter's post flagged that BFI's own deck had put a cancellation on the 8 May 2025 EGMS agenda - a different mechanism than the sale-to-Trinugraha-or-third-parties shareholders had actually approved in 2022. This quarter's financial statements confirm what happened next: shareholders approved the cancellation at that EGMS, BFI executed a formal Capital Reduction under Indonesia's Companies Law and the applicable share-buyback regulation, and the deed was notarized on 3 June 2025. The Ministry of Law approved the reduction on 14 July 2025 - a subsequent event relative to the 30 June period-end, but disclosed in this filing. Once formally completed, BFI's issued and paid-up shares will fall by 5.81%. The three-year mandate first flagged in this backlog's coverage of the 2022 EGMS resolution is now closed, on different terms than originally voted but with a definite outcome instead of continued deferral.
The Bank Jago joint-financing facility's ceiling is nearly saturated, and its effective-until date lands within days of this filing
The off-balance-sheet joint-financing arrangement with PT Bank Jago Tbk - amended to a Rp5,000,000M ceiling on 17 January 2025 - carried a net balance of Rp2,089,609M at 30 June 2025, up 22.8% from Q1's Rp1,698,816M and now using roughly 42% of the ceiling. More pressingly, that January 2025 amendment's own effective-until date is 5 August 2025 - just eleven days after this quarterly report was signed (25 July 2025) - and neither the financial statements nor the presentation disclose a renewal as of this filing. The facility has been renewed or expanded on shortening notice before, but a ceiling this close to fully drawn, expiring this close to the filing date with no disclosed successor terms, is worth tracking into next quarter's filing.
The direct Bank Jago related-party borrowing kept shrinking as the joint-financing relationship grew
BFI's own direct fund-borrowing balance from Bank Jago as a related party fell to Rp101,781M at period-end from Rp169,094M a year earlier - a 39.8% year-over-year decline, and down 25.0% from Q1's Rp135,730M, continuing the drawdown this backlog first flagged at FY2024. The two Bank Jago relationships keep diverging: BFI's own direct borrowing from the bank keeps shrinking while the joint-financing arrangement the two run together for consumers keeps expanding toward its ceiling (see above).
BFI issued Rp1 trillion of new bonds in Q2 while retiring a maturing series
BFI issued Sustainable Bonds VI Phase II Year 2025 for Rp1,000,000M during the quarter, with a disclosed coupon range of 6.45%-6.90% per annum, earmarked for working capital across investment, working-capital, and multipurpose financing (explicitly excluding Sharia-based financing). In the same quarter, the company paid off Rp385,000M of principal and interest on Sustainable Bonds V Phase IV Year 2023 Series B, which matured on 14 April 2025. Net securities issued rose 13.2% quarter-over-quarter to Rp3,322,114M as a result, continuing this backlog's multi-quarter tracking of BFI's bond book as one funding source among several rather than the dominant one - bank borrowings still made up 51% of external funding sources at period-end, per the company's own funding-mix disclosure.
Target Valuation Range
Market cap ~Rp12,257,098M (~$755.3M) at ~7.47x TTM P/E and ~1.17x P/B - fairly valued to modestly undervalued on trailing earnings, but the flat multiple against worsening credit ratios suggests the market has already priced in caution about where Cost of Credit and NPF are headed next, rather than being caught off guard by this quarter's numbers.
Using 15,039,383,620 shares outstanding net of treasury (unchanged as of the 30 June 2025 balance sheet - see Beyond the Usual above, since the cancellation itself is a post-period-end subsequent event) and the Rp815 closing price:
| Market cap buildup | H1 2025 |
|---|---|
| Share price (period-end) | Rp815 |
| Shares outstanding | 15,039,383,620 |
| Market capitalization | Rp12,257,098M (~$755.3M) |
| Book value (total equity) | Rp10,516,356M |
| Peer-multiple sanity check | Q1 2025 | H1 2025 | Change |
|---|---|---|---|
| P/E (TTM) | ~7.62x | ~7.47x | essentially flat, despite TTM earnings growing a further 2.0% |
| P/B | ~1.15x | ~1.17x | essentially flat |
Market cap is essentially unchanged from Q1 2025's identical Rp815 close, after round-tripping through Rp880 (April) and Rp905 (May) in between. TTM P/E uses TTM net income of Rp1,641,102M (FY2024's Rp1,564,674M, less H1 2024's Rp685,796M, plus this half's Rp762,224M). The market isn't re-rating the stock upward as trailing earnings keep climbing, which is consistent with a market that's already discounting the credit-quality deterioration documented above rather than being surprised by it each quarter. Over the trailing two years (July 2023 through June 2025), the stock ranged from Rp815 (both this quarter's and Q1 2025's own closing price, the shared low) to Rp1,380 (February 2024's two-year high) - a 69.3% swing. The path itself has been choppier than a straight decline: down from Rp1,380 in February 2024 to a Rp895 trough in July 2024, a partial recovery toward Rp1,040 by September 2024, then a renewed slide to Rp815 by March 2025, a modest bounce to Rp905 in May, and back down to Rp815 by quarter-end - a stock that has spent over a year searching for a floor rather than trending cleanly in either direction. At ~7.47x trailing earnings and ~1.17x book against a 14.5% half-year ROAE, the stock is priced for a business that keeps growing earnings but whose credit cycle the market doesn't yet trust - a read this quarter's own NPF and Cost of Credit numbers don't contradict.
PT BFI Finance Indonesia Tbk's unaudited consolidated financial statements for the six-month period ended 30 June 2025 (with comparative figures for 30 June 2024), the company's Q2 2025 investor presentation dated 28 July 2025, and the company's media release dated 25 July 2025.