BFIN Credit Quality Improved Every Which Way in Q3 - So Why Did Two of Three Segments' Profit Crater?

A Quarter That Improved on Paper and Fractured Underneath

Look only at the sequential trend and 9M 2025 reads like the turnaround this backlog has been waiting for since H1's credit-quality scare. NPF (gross) eased to 1.55% at 30 September 2025, down 8 basis points from Q2's 1.63% - the highest half-year reading this backlog had ever recorded, per H1 2025's own five-year trend disclosure. Cost of Credit fell to 4.5% for Q3 alone, down from Q2's 4.9%. Both profitability ratios moved the right way too: ROAA rose to 6.4% from Q2's 5.7%, and ROAE rose to 15.0% from Q2's 13.5%. Every quarter-over-quarter metric in the company's own Key Ratios table improved at once - a genuinely rare alignment in this backlog's history, where profitability and credit quality have more often moved in opposite directions than together.

But the nine-month cumulative figures blend two quarters that no longer look alike. Reconstructing Q3 alone from the 9M and H1 segment tables shows Motorcycles' profit before tax fell an estimated 27.6% year-over-year in the third quarter by itself (Rp78,465M from Q3 2024's approximate Rp108,335M), even though the 9M cumulative figure reads a much milder -2.8% decline. Others fared worse still: an estimated 48.0% year-over-year fall in Q3 alone (Rp44,521M from Q3 2024's approximate Rp85,567M), compared with the 9M cumulative's already-negative -29.2%. Only Cars kept accelerating, its estimated Q3-alone profit before tax up roughly 12.2% year-over-year. See Three Segments, One Quarter That Broke Two of Them below for the full reconstruction and Key Financial Metrics for how the consolidated numbers still came out ahead despite this.

Layered on top: the 927,732,000-share treasury overhang this backlog has tracked since 2022 and whose cancellation H1 2025 confirmed was formally completed on 22 July 2025 - and less than two weeks later, BFI opened an entirely new share buyback program. See The Prescription and Beyond the Usual below.

The Prescription

BFI should extend its existing segment-level disclosure to include an actual asset-quality ratio (NPF or an equivalent) by product line, not just the provision-for-impairment charge it already breaks out by segment in Note 30. This backlog has asked for segment-level Cost of Credit or NPF since 9M 2023, and the segment note has in fact always disclosed a provision-for-impairment figure per segment (Cars, Motorcycles, Others) - a partial answer that makes an approximate segment cost-of-credit computable, which is how this quarter's Q3-alone reconstruction was possible at all. What's still missing is the delinquency ratio itself: a reader can see that Motorcycles and Others each absorbed a much larger provision in Q3 relative to their book size, but can't tell whether that reflects genuinely worsening loan performance in those segments specifically or a provisioning-policy choice applied unevenly across products. Publishing NPF (or NPL) by segment would resolve that in one line, instead of leaving it to be inferred from a P&L note that wasn't built to answer this question.

What BFI should stop doing: opening a new, discretionary share buyback program within weeks of formally retiring a 927,732,000-share overhang that took three years and a shareholder vote to unwind. The two actions aren't inconsistent on the law - a market-stabilization buyback under POJK 13/2023 is a different instrument than the 2022 disposal mandate that just closed - but the sequence reads oddly to a shareholder who just watched BFI shrink its own share count via Capital Reduction, only to see the company start accumulating treasury shares again through open-market purchases a month later. If the goal is genuinely price stabilization amid "significantly fluctuating market conditions," as the company's own disclosure states, that rationale deserves to be argued on its own terms rather than left to look like a reflexive reach for the same lever just retired.

Key Financial Metrics

Nine months ended 30 September 2025 vs. nine months ended 30 September 2024

FX: Rp16,683 = USD 1 (30 September 2025 close, the period-end date), following the convention used throughout this backlog.

Metric	9M 2025 (IDR)	9M 2025 (USD)	9M 2024 (IDR)	YoY
Total Income ("Net Revenue" equivalent)	Rp5,017,903M	~$300.8M	Rp4,708,513M	✅ +6.6%
Profit Before Tax ("Operating Income" equivalent)	Rp1,439,670M	~$86.3M	Rp1,373,138M	✅ +4.8%
Net Income	Rp1,167,181M	~$70.0M	Rp1,114,908M	✅ +4.7%
Total Cash and Cash Equivalents	Rp1,426,823M	~$85.5M	Rp1,499,940M	⚠️ -4.9%

Profit before tax remains the closest operating-income equivalent for this lender, as established throughout this backlog. Basic earnings per share rose to Rp77 for 9M 2025 from Rp74 a year earlier (+4.1%). Operating cash flow rose to Rp811,887M from Rp676,294M a year earlier, while investing outflow widened modestly to Rp114,077M from Rp83,691M. Total cash fell 4.9% year-over-year to Rp1,426,823M, a much smaller decline than H1's own -27.9% - the multi-year cash decline this backlog has tracked since 2021's post-bond-issuance peak is easing rather than accelerating.

New financing bookings grew 15.2% year-over-year to Rp16,375 billion for the nine months, while Total Income grew just 6.6% over the same period - the ordinary lag of an installment lender's business model this backlog has established repeatedly, since new bookings convert to income only over the life of each loan. Q3 alone accelerated further: bookings rose 9.9% quarter-over-quarter to Rp5,480 billion, from Q2's Rp4,983 billion, extending the recovery from Q2's own 15.7% sequential drop and confirming that dip was not the start of a longer slowdown.

Balance sheet metric	30 Sep 2025 (IDR)	30 Sep 2025 (USD)	30 Sep 2024 (IDR)	YoY
Total Assets	Rp25,429,044M	~$1,524.4M	Rp24,109,096M	✅ +5.5%
Financing Receivables (net)	Rp22,344,109M	~$1,339.5M	Rp21,130,125M	✅ +5.7%
Total Liabilities	Rp14,536,448M	~$871.4M	Rp13,860,038M	⚠️ +4.9%
Fund Borrowings (net)	Rp10,074,448M	~$603.9M	Rp9,898,186M	⚠️ +1.8%
Securities Issued (bonds, net)	Rp3,323,828M	~$199.3M	Rp2,934,563M	⚠️ +13.3%
Total Equity	Rp10,892,596M	~$653.0M	Rp10,249,058M	✅ +6.3%

Debt-to-equity^» (fund borrowings plus bonds, over equity, following this backlog's convention) eased to roughly 1.23x, down from 9M 2024's own ~1.25x, H1 2025's 1.31x, and FY2024's 1.35x - the clearest single-quarter step in the multi-quarter de-leveraging this backlog has tracked since the reversal first flagged at 9M 2024. Including the off-balance-sheet joint-financing balance, the company's own "proforma debt" figure of Rp15,947 billion is up 15.7% year-over-year from Rp13,780 billion - still growing faster than on-balance-sheet debt because the Bank Jago joint-financing book itself keeps 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 Rp200,597M from FY2024's Rp311,544M, against an unchanged Rp1,250,000M limit.

Key Operational Metrics

• New financing originations: Rp16,375 billion for 9M 2025 (excluding Pinjam Modal channeling), up 15.2% year-over-year from 9M 2024's Rp14,219 billion; Q3 alone rose 9.9% quarter-over-quarter to Rp5,480 billion from Q2's Rp4,983 billion (see Key Financial Metrics above).
• Managed receivables (including off-balance-sheet joint financing, per the deck): Rp25,992 billion at period-end, up 13.0% year-over-year and 1.4% quarter-over-quarter from Q2's Rp25,627 billion.
• Non-Performing Financing (NPF) (company's own disclosed figure^», gross basis): 1.55% for 9M 2025, up 12 basis points year-over-year from 1.42%, but down 8 basis points quarter-over-quarter from Q2's five-year-high 1.63%. Net NPF stood at 0.26%. NPF coverage held at 2.5x, up from Q2's 2.4x but still below 9M 2024's 2.6x.
• Cost of Credit (CoC): 4.6% for 9M 2025, up 93 basis points year-over-year from 9M 2024's 3.7%; Q3 2025 alone eased to 4.5%, down 41 basis points from Q2's 4.9% - the company's presentation again attributes the year-over-year rise to additional provisioning and loss on repossessed assets, without segment-level ratio detail (see The Prescription above).
• Net Interest Spread: 11.6% for 9M 2025, down 30bps from 9M 2024's 11.9%; Q3 alone was 11.6%, up 13bps from Q2's 11.5% - a small reversal of the multi-year compression this backlog has tracked.
• Cost to Income: 42.9% for 9M 2025, down 407bps from 9M 2024's 46.9% - a genuine full-period improvement, essentially flat quarter-over-quarter (42.9% in Q3 versus Q2's 43.0%).
• Return on average assets (after tax): 6.2% for 9M 2025, flat year-over-year against 9M 2024's 6.2%; Q3 alone was 6.4%, up 75bps from Q2's 5.7%.
• Return on average equity (after tax): 14.7% for 9M 2025, down 45bps from 9M 2024's 15.1%; Q3 alone was 15.0%, up 152bps from Q2's 13.5%.
• Earnings per share: Rp77 basic for 9M 2025, up from Rp74 a year earlier (see Key Financial Metrics above).

Where H1 2025 showed profitability ratios improving year-over-year while credit-quality ratios worsened, the quarter-over-quarter read for Q3 alone shows something rarer: every ratio in the company's own table - profitability and credit quality alike - moved the favorable direction from Q2 to Q3. That alignment doesn't yet show up in the segment-level profit figures, though (see below), which is why this quarter reads as improving and fracturing at the same time depending on which level of the business a reader looks at.

Three Segments, One Quarter That Broke Two of Them

The company reports Cars, Motorcycles, and Others on the same basis as every prior period in this backlog.

Cars - still the largest segment: Rp3,416,622M of income for 9M 2025 (68.1% of total, up from 9M 2024's 67.7%), up 7.2% year-over-year, with profit before tax rising 16.3% YoY to Rp1,012,797M from Rp870,577M and margin improving to 29.6% from 27.3%.

Motorcycles - Rp756,625M of income (15.1% of total, down from 9M 2024's 16.1%), essentially flat year-over-year (-0.04%), with profit before tax falling 2.8% YoY to Rp261,610M from Rp269,058M and margin compressing slightly to 34.6% from 35.5%.

Others (heavy equipment/machinery, property, and Sharia financing) - Rp844,656M of income (16.8% of total, up from 9M 2024's 16.2%), up 10.6% YoY - but profit before tax fell 29.2% YoY to Rp165,263M from Rp233,503M, with margin compressing sharply to 19.6% from 30.6%. This is the segment H1 2025 flagged as reversing after Q1's own growth, and the reversal deepened rather than stabilized.

Backing H1 2025's own segment figures (Cars Rp637,089M, Motorcycles Rp183,145M, Others Rp120,742M profit before tax, as reported last quarter) out of these 9M totals gives an estimate of Q3 alone, compared against the same subtraction applied to 9M 2024 and H1 2024's own published figures: Cars' estimated Q3-alone profit before tax rose roughly 12.2% year-over-year (to approximately Rp375,708M from approximately Rp334,697M); Motorcycles fell an estimated 27.6% (to approximately Rp78,465M from approximately Rp108,335M); and Others fell an estimated 48.0% (to approximately Rp44,521M from approximately Rp85,567M). The 9M cumulative figures understate both declines because Q1 and Q2's own results are blended in - Motorcycles' 9M figure reads a mild -2.8%, masking a Q3-alone decline nearly ten times as steep, and Others' already-negative -29.2% 9M figure still understates a Q3-alone collapse approaching half the segment's year-ago profit. Cars is now the only segment carrying its own weight standalone, a sharper version of the pattern H1 2025 first showed for Others alone.

Beyond the Usual

The restructured-loan balance stays missing for a sixth straight filing

H1 2024 removed the restructured-loan balance from the financing-receivables note, and neither 9M 2024, FY2024, Q1 2025, nor H1 2025 restored it. This quarter's financing-receivables note again carries no line item for restructured loans. The gap has now held for six consecutive filings, spanning five interim reports and a full annual report, through the period in which both NPF and Cost of Credit reached their worst readings in the disclosed multi-year trend before this quarter's partial easing.

A new share buyback launched weeks after the old treasury overhang was formally retired

The 927,732,000-share cancellation confirmed last quarter formally completed on 22 July 2025, per the Indonesia Stock Exchange's confirmation letter, reducing BFI's issued and paid-up shares to 15,039,383,620. On 1 August 2025 - barely a week later - the company disclosed a new buyback program under Indonesia's market-stabilization regulation (POJK 13/2023), covering "significantly fluctuating market conditions," for up to 3.3% of shares or a maximum purchase value of Rp500,000M, running from 4 August to 31 October 2025. By period-end, 19,751,300 shares had been repurchased for Rp15,573M; the company's own 31 October 2025 investor presentation discloses more than 175 million shares repurchased by that date, well past the quarter covered by this filing. A three-year-old mandate to shrink the share count just closed, and a new one to grow the treasury balance opened almost immediately after - see The Prescription above.

A shareholder-level change within the controlling entity: Ares Management replaces Northstar

BFI's own 31 October 2025 investor presentation discloses that Ares Management has replaced Northstar Group as a shareholder within Trinugraha Capital, BFI's controlling shareholder - a change at the ownership-chain level above BFI itself, not inside BFI's own filed financial statements for this period. Northstar has been disclosed as part of Trinugraha's ownership structure since this backlog's earliest posts, so this marks a genuine change to a relationship that predates the entire backlog. No further detail on the transaction itself - timing, size, or governance implications for BFI - has surfaced yet in either the financial statements or the presentation.

The direct Bank Jago term loan was resized and partly redirected to a new sharia facility

On 10 September 2025, BFI amended its original 24 June 2021 Rp600,000M Term Loan Credit Agreement with PT Bank Jago Tbk, adjusting the limit to Rp125,000M and reallocating Rp75,000M of that reduction to a newly created sharia-based financing facility with the same bank. The direct lending relationship with Bank Jago keeps shrinking and being restructured even as the separate off-balance-sheet joint-financing arrangement between the two companies keeps expanding toward its own Rp5,000,000M ceiling (see below) - the same divergence this backlog first flagged at FY2024.

The Bank Jago joint-financing ceiling was raised again, to Rp5 trillion effective through 2027

On 17 July 2025, BFI and PT Bank Jago Tbk amended and restated their joint-financing facility agreement, raising the ceiling to Rp5,000,000M, effective until 5 August 2027. The net joint-financing balance grew to Rp2,548,594M at period-end, from Rp1,223,408M at FY2024 - more than doubling within three quarters, and continuing the pattern flagged since Q1 2025's ceiling increase of the facility's headroom expanding just ahead of the balance that fills it.

Three new bank facilities diversified the funding base during the quarter

BFI signed three new credit facilities in the third quarter: a Rp150,000M factoring agreement with PT Multifinance Anak Bangsa (4 July 2025), a Rp250,000M facility with PT Bank Victoria International Tbk (16 July 2025), and a Rp2,000,000M facility with PT Bank Negara Indonesia (Persero) Tbk (21 August 2025) - the largest single new facility signed in this backlog's tracking to date. None of the three had been drawn as of period-end. Adding a state-owned bank at this scale, alongside a specialty factoring counterparty, continues the funding-source diversification this backlog has tracked since the multi-year shift away from concentrated bank exposure.

Target Valuation Range

Market cap ~Rp11,490,019M (~$688.7M) at ~7.11x TTM P/E and ~1.05x P/B - modestly undervalued on both trailing earnings and book value, with the stock's own price decline this quarter outpacing a still-growing (if segment-uneven) earnings base - not a market discovering new bad news, but one that hasn't yet re-rated for the credit-quality easing this quarter's ratios actually show.

Using 15,019,632,320 shares outstanding net of treasury (15,039,383,620 issued and paid-up shares, less 19,751,300 shares held in treasury under the new buyback program - see Beyond the Usual above) and the Rp765 closing price:

Market cap buildup	9M 2025
Share price (period-end)	Rp765
Shares outstanding	15,019,632,320
Market capitalization	Rp11,490,019M (~$688.7M)
Book value (total equity)	Rp10,892,596M

Peer-multiple sanity check	H1 2025	9M 2025	Change
P/E (TTM)	~7.47x	~7.11x	down - TTM earnings roughly flat, a price effect
P/B	~1.17x	~1.05x	down - lowest this backlog has recorded outside the 2020 pandemic crash

Market cap is down 6.3% from H1 2025's ~Rp12,257,098M, on a lower share count and a lower price. TTM P/E uses TTM net income of Rp1,616,947M (FY2024's Rp1,564,674M, less 9M 2024's Rp1,114,908M, plus this period's Rp1,167,181M). Every quarter since FY2020 has traded meaningfully above 1x book until now (Q1 2020 alone saw P/B fall as low as ~0.57x, recovering only gradually through 2020's remaining quarters). Over the trailing two years (October 2023 through September 2025), the stock ranged from Rp760 (August 2025, an outright two-year low) to Rp1,380 (February 2024's two-year high) - an 81.6% swing, the widest this backlog has tracked for BFI. The path was a steady, near-uninterrupted slide from February 2024's peak through most of 2025, briefly interrupted by Q1 2025's bounce to Rp905 in May before resuming: Rp1,340 → Rp1,050 → Rp945 → Rp895 → Rp1,040 → Rp945 (Dec 2024) → Rp880 → Rp815 (Mar 2025) → Rp905 (May) → Rp815 (Jun) → Rp765 (Jul) → Rp760 (Aug) → Rp765 (Sep) - a market that has now spent over a year and a half without reclaiming even half of its 2024 peak. At ~7.11x trailing earnings and ~1.05x book against a 14.7% nine-month ROAE, the stock is priced closer to a distressed reading than this quarter's own quarter-over-quarter credit-quality improvement would suggest - a gap between price and the company's own most recent ratios that's worth tracking into next quarter.

---