Bank Negara Indonesia: 9M profit up 5.8% but growing slower than net interest income

Bank Negara Indonesia's 9M 2026 report showed net interest income of IDR 33,238.4 bn (+13.6% YoY) and net profit of IDR 16,116.1 bn (+5.8%). Profit is growing slower than net interest income, and its share of net interest income fell to 48.5% from 52.1% a year earlier. At a P/E LTM of 6.1 and a dividend yield of 10.6%, the stock looks rather attractive, but the key question is the sustainability of the margin and the quality of earnings.

Key takeaways

— 9M net interest income rose 13.6%, while profit grew only 5.8%

— 9M profit was 48.5% of net interest income versus 52.1% a year earlier

— In Q1 2026 net interest income grew 12.1% YoY

— A 10.6% dividend yield at a P/E LTM of 6.1 shows the market values the bank cheaply

— The portal model implies 17% upside to fair value

— ROE of 12.5% at a P/E of 6.1 means the bank earns on capital more than the market pays for it

Attractiveness

Key figures, IDR bn

9M net interest income rose 13.6%, while profit grew only 5.8%

9M 2026 net interest income reached IDR 33,238.4 bn, up 13.6% YoY. This is the bank's main revenue source, and its growth shows that the loan book and lending rates are working in its favour.

Net profit for the same period was IDR 16,116.1 bn, up only 5.8%. The gap between net interest income and profit growth means costs or provisions are rising faster than income. The Q1 2026 report shows impairment provisions of IDR 2,417.7 bn versus IDR 1,759.9 bn a year earlier – a 37.4% increase.

9M operating profit was IDR 20,277.4 bn. It is growing, but pressure on profit comes not only from provisions but also from operating expenses: in Q1 2026 they rose to IDR 7,479.3 bn from IDR 6,739.6 bn a year earlier. Salaries and benefits added 15.6%, general and administrative expenses – 6.8%.

For a shareholder this means the bank is growing its core business, but part of that growth is eaten by costs and provisions. Profit sustainability depends on whether the cost of risk can be held at the current level.

9M profit was 48.5% of net interest income versus 52.1% a year earlier

The share of net profit in net interest income for 9M 2026 was 48.5%, versus 52.1% a year earlier. This is not a margin or a profitability ratio but a ratio of two absolute figures, and it shows that for every rupiah of net interest income the bank retains less profit than before.

The 3.6 percentage point decline is explained by faster growth in costs. In Q1 2026 impairment provisions rose 37.4%, operating expenses – 11.0%, while net interest income – 12.1%. Labour costs rose 15.6%, faster than income.

If the profit share of net interest income continues to decline, profit growth may slow further. For an investor this is a signal that earnings quality is deteriorating even as absolute figures grow.

In Q1 2026 net interest income grew 12.1% YoY

In Q1 2026 net interest income was IDR 11,026.0 bn versus IDR 9,834.4 bn a year earlier, up 12.1%. This is slightly slower than the 9M figure (+13.6%), suggesting some deceleration early in the year.

Q1 profit was IDR 5,685.8 bn versus IDR 5,380.5 bn a year earlier, up 5.7%. This is close to the 9M trend (+5.8%), meaning the slowdown in profit was not a one-off but sustained.

Q1 operating profit was IDR 6,904.9 bn, up 5.4%. Net interest income is growing faster than profit, and this is the main challenge for the bank this year.

A 10.6% dividend yield at a P/E LTM of 6.1 shows the market values the bank cheaply

The trailing 12-month dividend yield is 10.6%. This is a high yield, well above government bond yields and deposit rates. At a P/E LTM of 6.1, the market values the bank below its book value and historical levels.

On the portal's model, which compares ROE and P/B, the upside to fair value is +17%. This is our own estimate, not a market consensus or a target price.

A high dividend yield at a low P/E usually means the market is pricing in risks – either falling profits or deteriorating asset quality. In BBNI's case profit is growing, but slower than income, and this may limit future payouts.

The portal model implies 17% upside to fair value

Our model, which compares ROE of 12.5% with the current P/B, implies 17% upside to fair value. This means that at current earnings and capital the bank is cheaper than it should be if the market valued it fairly.

However, the model is sensitive to ROE sustainability. If profit continues to grow slower than net interest income, ROE may decline and the upside will shrink. In Q1 2026 profit grew 5.7% while net interest income grew 12.1%, already putting pressure on ROE.

For an investor this means the current valuation is attractive but needs confirmation – either faster profit growth or stabilisation of costs and provisions.

ROE of 12.5% at a P/E of 6.1 means the bank earns on capital more than the market pays for it

Return on equity (ROE) is 12.5%, above government bond yields and deposit rates. At a P/E of 6.1 and a market capitalisation of IDR 128,302.7 bn, the bank is valued below its ability to generate profit.

This combination – high ROE and low P/E – usually points to undervaluation, but may also reflect risks the market sees ahead. In BBNI's case these are slowing profit growth and rising provisions.

If ROE can be held at 12.5% or above, the current valuation looks attractive. If profit continues to grow slower than income, ROE may decline, and then the current P/E will not look as low as it seems.

Valuation on the latest reported figures

Bottom line

The strong side of the report is net interest income growth of 13.6% over 9M and 12.1% in Q1. The weak side is profit growth of only 5.8%, with its share of net interest income falling to 48.5% from 52.1%. A high dividend yield of 10.6% and a P/E of 6.1 make the stock attractive, but the key question is whether the bank can hold ROE at 12.5% amid rising provisions and costs. The verdict is rather attractive, with a caveat on earnings quality.