BMRI Mandiri's Profit Growth Came Back - So Why Did the Stock Fall 15%?

The Growth Rebound the Deposit Problem Didn't Fix

The Q1 2024 post closed on a bank whose profit growth had cratered from 33.7% to 1.1% YoY in a single quarter, with the bank-only Loan-to-Deposit Ratio^» (LDR) breaking through to a new high of 89.66% and BOPO^» jumping 6.5 points in three months. This is Mandiri's H1 2024 published consolidated financial statement (unaudited, six-month period ended June 30, 2024), and the picture it shows is more mixed than either a clean recovery or a continuation of Q1's slide.

Profit growth actually came back. Consolidated net income attributable to owners for the first half of 2024 was Rp26,550,640 million, up 5.23% YoY from H1 2023's Rp25,231,887 million - itself a cumulative figure that undersells the turnaround, because it's dragged down by Q1's weak base. Isolating Q2 alone (H1 minus the already-reported Q1 figures): Mandiri earned Rp13,848,462 million in the second quarter, up from Rp12,671,716 million a year earlier, a standalone +9.29% YoY - a real acceleration from Q1's 1.1%, not just an easier comparison. Operating income told the same story: consolidated profit from operations rose 6.36% YoY through H1, versus Q1's 2.1% pace.

The deposit-versus-loan tension didn't resolve, though - it just moved into a different phase. Bank-only deposits actually snapped back hard this quarter, up +6.52% QoQ from Q1-end's Rp1,232.52 trillion to Rp1,312.83 trillion - more than reversing Q1's -0.78% outflow. But bank-only loans grew even faster, +7.38% QoQ to Rp1,196.10 trillion, so the bank's own filed LDR climbed again, from 89.66% at Q1-end to 90.48% at Q2-end - the fourth consecutive quarter this backfill has recorded a higher LDR reading than the one before it. Consolidated LDR (computed from the filed balance sheet) moved the same way, from 88.68% to 90.09%.

The Prescription

The Q1 2024 post argued Mandiri needs deposit growth that doesn't depend on a single quarter-end placement wave to look adequate on a full-year basis. This quarter is a partial test of that: deposits did grow meaningfully this quarter, by design rather than by a one-off placement - and the LDR still rose, because loan growth simply outran it again. The operational move for the second half of 2024 is the same prescription, sharpened: Mandiri's wholesale-heavy loan strategy needs to either slow its own growth rate to something the deposit franchise can actually fund, or accept that CASA^» funding cost advantages - currently a still-healthy 79.69% bank-only CASA ratio - will keep thinning as the LDR keeps climbing into territory (above 90%) that starts to matter for regulators and funding cost alike.

What it should stop doing: treating BOPO's Q1 spike as fully explained by one-off seasonality without showing the reversal. Bank-only BOPO improved from Q1's 58.38% to 55.88% this quarter - a real sequential improvement that partly vindicates the "January bonus accrual" seasonal explanation floated last quarter - but it's still worse than Q2 2023's 54.09%, meaning the underlying cost base grew faster than operating income even after the seasonal spike unwound. A bank that wants credit for "it was just seasonal" needs BOPO to fully close that YoY gap by year-end, not just partly close it.

Key Financial Metrics

H1 2024 vs H1 2023 (P&L, consolidated), and June 30, 2024 vs December 31, 2023 (balance sheet, consolidated)

FX: IDR 16,375.00 = USD 1 (June 30, 2024 close, per the bank's own filed exchange-rate disclosure); IDR 15,397.00 = USD 1 (December 31, 2023 close, per the same disclosure); IDR 14,992.50 = USD 1 (June 30, 2023 close, per the same disclosure).

Metric	H1 2024 (IDR)	H1 2024 (USD)	H1 2023 (IDR)	YoY
Net interest, sharia & premium income, net ("Net Revenue" equivalent)	Rp50,182,541M	~$3.06B	Rp48,252,517M	⚠️ +4.0%
Operating Income (profit from operations)	Rp36,605,750M	~$2.24B	Rp34,417,893M	✅ +6.4%
Net Income (attributable to owners)	Rp26,550,640M	~$1.62B	Rp25,231,887M	✅ +5.2%
EPS (basic, H1 cumulative)	Rp284.47	~$0.0174	Rp270.34	✅ +5.2%

Operating cash flow for H1 2024 was approximately negative Rp25.99 trillion (~-$1.59B; against about Rp1.56 trillion of fixed- and intangible-asset capex) - narrower than H1 2023's -Rp106.25 trillion, since this year's loan growth was funded more by an actual deposit recovery than by drawing down cash. Total cash and cash equivalents at period-end is Rp206,093,448M (~$12.58B), down modestly from Rp213,070,357M at the end of Q1 and from Rp243,801,693M at the start of the year.

Balance sheet metric	Jun 30, 2024 (IDR)	Jun 30, 2024 (USD)	Dec 31, 2023 (IDR)	Change since Dec 2023
Total Assets	Rp2,257,801,434M	~$137.90B	Rp2,174,219,449M	✅ +3.9%
Loans (gross, Kredit)	Rp1,487,438,239M	~$90.85B	Rp1,359,832,195M	✅ +9.4%
Total Deposits (Giro + Tabungan + Deposito, incl. sharia)	Rp1,651,024,724M	~$100.83B	Rp1,576,949,619M	✅ +4.7%
Total Equity (attributable to owners)	Rp254,353,493M	~$15.53B	Rp260,852,784M	⚠️ -2.5%

Equity is still below its December 2023 level, but has clawed back most of Q1's dividend-driven drop: from Rp240,686,777M at Q1-end to Rp254,353,493M at Q2-end, a +5.68% QoQ recovery as H1's retained earnings accumulate (see Beyond the Usual below for the dividend itself, which was paid entirely in Q1 and doesn't repeat this quarter).

Q2 2024 standalone net income grew roughly 9.3% YoY - a real reversal from Q1's 1.1% stall - but the bank-only LDR still climbed to a fourth consecutive backfill-high of 90.48%, because deposits grew fast and loans grew faster. See The Growth Rebound the Deposit Problem Didn't Fix above.

Key Operational Metrics

Bank-only ratios are from the bank's own filed Statements of Financial Ratios (Jun 2024 vs Jun 2023); consolidated figures are computed directly from the filed consolidated statements, marked "computed"

• Loan-to-Deposit Ratio (LDR) - bank-only: 90.48%, up from 85.68% a year earlier and up from Q1 2024's 89.66% - a new backfill high for a fourth straight quarter. Consolidated: 90.09% (computed: Rp1,487,438,239M loans ÷ Rp1,651,024,724M deposits), up from Q1's computed 88.68%.
• CASA ratio - bank-only: 79.69% (computed: Rp1,046,163,504M demand + saving deposits ÷ Rp1,312,826,259M total deposits), essentially flat versus Q1 2024's 79.44% and December 2023's 79.40% - the CASA mix itself isn't eroding even as the LDR climbs.
• NIM^» - bank-only: 4.92%, down from 5.30% a year earlier but up slightly from Q1 2024's 4.89% - a small sequential recovery from the quarter this blog first flagged as a NIM low point, though still well below December 2023's 5.25%.
• NPL^» ratio - gross: bank-only 1.01%, essentially flat versus Q1 2024's 1.02% and down from 1.53% a year earlier.
• NPL ratio - net: bank-only 0.35%, up from Q1 2024's 0.33% and from 0.29% a year earlier - a small but now three-quarter-long creep upward.
• CAR (capital adequacy)^»: bank-only 19.35%, down from 19.96% a year earlier - the second straight quarter this backfill has recorded a YoY CAR decline, though up sequentially from Q1's 19.01% and still comfortably above regulatory minimums.
• ROA - after tax: bank-only 3.58%, down from 3.72% a year earlier, up from Q1 2024's 3.31% as more of the year's earnings accrue into the annualized figure.
• ROE - after tax: bank-only 24.39%, down from 25.78% a year earlier, up from Q1 2024's 21.52% for the same reason.
• Cost-to-Income Ratio^» (CIR): bank-only 32.43%, improved both YoY (32.82% a year earlier) and QoQ (34.31% at Q1 2024).
• Operating Expenses to Operating Income (BOPO): bank-only 55.88%, down sharply from Q1 2024's 58.38% but still up from 54.09% a year earlier - see The Prescription above.
• Not available in this filing: an internal segment income-statement or NPL breakdown by Wholesale/Retail/Commercial banking, and no results presentation or earnings call transcript was filed alongside this quarter's published statement - the segment-level thread first opened in H1 2023 and last updated in 9M 2023 remains unresolved four quarters running.

Mandiri Shares Fell 15.2% From March's Close, Despite the Profit Rebound

The Q1 2024 post closed with shares up 19.8% in a single quarter to Rp7,250, a rally that ran well ahead of that quarter's 1.1% profit growth. Q2 2024 gave most of that back: shares fell to Rp6,900 at end-April, then dropped sharply to Rp5,900 at end-May - a trough -18.6% below March's close - before recovering to Rp6,150 by June 28, 2024. Net for the quarter, that's a -15.2% decline from Rp7,250, even as Q2 standalone profit growth accelerated to roughly 9.3% YoY (see The Growth Rebound the Deposit Problem Didn't Fix above) - the opposite pairing from Q1, where the stock rallied on numbers that were actually decelerating. Against Q2 2023's Rp5,200 close, June 2024's Rp6,150 is still up +18.3% YoY (no further stock split has occurred since the 1:2 split that took effect April 2023, so both prices are on the same nominal, actually-quoted basis).

Beyond the Usual

Bank-only capital adequacy fell YoY for a second straight quarter

Bank-only CAR of 19.35% at Q2 2024 is down from 19.96% a year earlier - the Q1 2024 post flagged the first YoY CAR decline in this backfill (19.01% vs 19.52%), and this quarter extends it to two in a row, even as the absolute ratio recovered slightly on a sequential basis (19.01% → 19.35%). The level remains well above regulatory minimums and the filing's own capital-buffer disclosure shows Mandiri comfortably clearing its capital conservation and countercyclical buffer requirements. But a bank funding record loan growth against a still-climbing LDR (see above) with a capital cushion that's now been thinner than the prior year for two consecutive quarters is a trend worth continuing to watch, not a one-quarter blip.

The bank's own currency-risk exposure metric nearly halved YoY

Mandiri's disclosed Net Open Position (overall) - a regulatory measure of how exposed the bank's balance sheet is to foreign-exchange rate swings - fell to 0.68% at June 2024 from 1.34% a year earlier, well inside Bank Indonesia's regulatory ceiling in both periods. This is a genuinely obscure line in the compliance section of the filing that a reader would never see in the earnings deck or press release, and it's a meaningfully lower FX-risk posture at a moment when the rupiah moved from roughly Rp14,992.50 to Rp16,375.00 against the dollar over the same twelve months - Mandiri trimmed its open currency exposure into a period of real IDR weakness rather than being caught by it.

The primary Rupiah reserve requirement the bank must hold at Bank Indonesia dropped sharply

Mandiri's disclosed average primary Rupiah reserve requirement fell to 5.41% at June 2024 from 7.69% a year earlier - a regulatory ratio set by Bank Indonesia, not a bank-specific choice, but one that directly affects how much of Mandiri's Rupiah liquidity is locked up non-earning at the central bank versus available for lending. A roughly 2.3 percentage-point reduction in the required reserve ratio is a real liquidity tailwind that helps explain how the bank funded this quarter's fast loan growth without a larger cash drawdown than the -Rp25.99 trillion operating cash flow above already shows.

Third-party COVID-era restructured loans kept shrinking

The filing's asset-quality table shows bank-only, third-party restructured loans (the COVID-era relief book this blog has tracked since the FY2023 post found it down to 1.58% of the loan book at year-end) falling further in absolute terms, from Rp86.84 trillion a year earlier to Rp75.82 trillion at June 2024 - a continued paydown of the pandemic-era restructuring overhang, consistent with the steady improvement this backfill has tracked in bank-only gross NPL (1.53% → 1.01% over the same twelve months).

Target Valuation Range

Market cap Rp574.00 trillion (~$35.05B), ~2.3x P/B, ~10.2x P/E. Bottom line: Mandiri got cheaper this quarter on both multiples even as trailing-twelve-month earnings grew - a P/E of roughly 10.2x and P/B of roughly 2.3x against a 24.39% bank-only ROE is a more attractively priced setup than the Q1 2024 post described, and the gap between the stock's re-rating and the business's actual earnings trend has now reversed direction twice in two quarters.

Using trailing-twelve-month net income of Rp56,378,810M (FY2023's Rp55,060,057M, less H1 2023's Rp25,231,887M, plus H1 2024's Rp26,550,640M) and the post-split share count of 93,333,333,332:

Market cap → book value	Q2 2024
Share price (period-end)	Rp6,150
Shares outstanding	93,333,333,332
Market capitalization	Rp574.00 trillion (~$35.05B)
Total equity (book value)	Rp254,353,493M
Book value per share	Rp2,725.22

Peer-multiple sanity check	Q1 2024	Q2 2024	Change
P/B	2.8x	2.3x	down
P/E	12.3x	10.2x	down

P/E: ~10.2x, using TTM EPS of approximately Rp604.06, against the Rp6,150 close on June 28, 2024. P/B: ~2.3x, using book value per share of approximately Rp2,725.22 (Rp254,353,493M total equity attributable to owners ÷ 93,333,333,332 shares). Market capitalization: approximately Rp574.00 trillion (~$35.05B). That's a meaningfully cheaper setup than the Q1 2024 post's ~12.3x P/E and ~2.8x P/B - the March rally that ran ahead of Q1's 1.1% profit growth has now fully unwound, and then some, even as Q2's standalone earnings growth actually accelerated to roughly 9.3% YoY. Multiples now sit below where they were at the FY2023 post (~10.3x P/E, ~2.2x P/B on a 27.3% bank-only ROE), on a similar P/E but a meaningfully lower ROE - a genuinely different combination than either prior quarter, and one that leaves less obvious room to call the stock "cheap" purely on the multiple, since ROE itself has come down from where it sat when the multiple was last this low. A real DCF remains the natural next step once enough of 2024's quarters clarify whether the LDR's fourth straight new high is a funding-strategy choice Mandiri can sustain or a constraint that eventually caps loan growth.

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