ID_BMRI: 9M profit up 13.9% while net interest income fell 10.8% – growth rests on costs, not on the business

ID_BMRI's 9M 2026 report shows a divergence: net interest income fell 10.8% year on year while net profit rose 13.9%. Profit for the reported period was IDR 47,109.5mn on net interest income of IDR 69,811.6mn, i.e. 67.5% versus 52.9% a year earlier. The stock trades at P/E LTM 5.37 with ROE of 21.1% and trailing dividend yield of 14.1%, and the portal model implies +17% upside to fair value. Given the cheap valuation and strong dividend, the share looks rather attractive, but the sustainability of profit against falling net interest income is the main question.

Key takeaways

— Net interest income fell 10.8% over 9M, and profit did not grow on it

— Profit of IDR 47,109.5mn on net interest income of IDR 69,811.6mn is 67.5% versus 52.9% a year earlier

— In Q1 2026 net interest income fell 1.8% after 5.5% growth a year earlier – deceleration

— P/E LTM 5.37 against ROE of 21.1% – the valuation is below what current returns on equity imply

— Trailing 12-month dividend yield of 14.1% is the main argument for the stock

— The portal model implies +17% upside to fair value

— The stock is held in the live Frontier AI Selection strategy – a fact, not an argument

Attractiveness

Key figures, IDR bn

Net interest income fell 10.8% over 9M, and profit did not grow on it

For 9M 2026 net interest income was IDR 69,811.6mn, 10.8% below a year earlier. This is the bank's core revenue line, and its decline means the underlying business contracted in the reported period.

Net profit over the same period rose 13.9% to IDR 47,109.5mn. The divergence in direction suggests profit was supported by factors other than interest income – likely cost reduction or one-off items, though the facts do not disclose their composition.

Operating profit for 9M was IDR 57,848.2mn, meaning pre-tax profit held above net interest income. For the result to be sustainable, the fall in net interest income needs to stop: if it continues, profit cannot keep growing on costs alone.

Profit of IDR 47,109.5mn on net interest income of IDR 69,811.6mn is 67.5% versus 52.9% a year earlier

The ratio of net profit to net interest income for 9M 2026 was 67.5% versus 52.9% a year earlier. This is not a margin or a profitability measure but the share of profit in net interest income, and it rose markedly.

A higher share means the bank keeps more profit per unit of net interest income. With the income itself down 10.8%, this may reflect cost cuts or lower provisions, but the facts do not disclose the specific cause.

For a holder, the level matters less than its sustainability. If the rise is due to one-off items, a return to the previous cost structure would bring profit back to a more modest level even with stable net interest income.

In Q1 2026 net interest income fell 1.8% after 5.5% growth a year earlier – deceleration

In Q1 2026 net interest income was IDR 25,049.6mn, 1.8% below Q1 2025. A year earlier, in Q1 2025, growth was 5.5%, so the trend shifted from growth to decline – deceleration.

The quarterly picture shows the decline in net interest income began not in the reported period as a whole but already in Q1. This makes the annual 10.8% fall a continuation of a trend rather than a one-off.

Yet profit in Q1 2026 rose to IDR 16,213.3mn from IDR 14,530.2mn a year earlier. Profit grew even with falling net interest income, which sharpens the question of where that growth came from.

P/E LTM 5.37 against ROE of 21.1% – the valuation is below what current returns on equity imply

The stock trades at P/E LTM 5.37 with a return on equity of 21.1%. Such a combination means the market values the bank's equity below the return it generates.

Profit over the last twelve months was IDR 67,082.7mn against a market capitalisation of IDR 360,266.5mn. That produces the low multiple, which is usually seen in stocks with questionable earnings sustainability.

The portal model, comparing ROE with P/B, implies +17% upside to fair value. This is our own estimate, not a market consensus or a target price.

Trailing 12-month dividend yield of 14.1% is the main argument for the stock

The trailing 12-month dividend yield is 14.1% of the current price. For a bank with a P/E of 5.37 this is a high level that compensates for the risk of falling net interest income.

A payout of this size rests on profit: over the last twelve months it was IDR 67,082.7mn. If the reported-period profit of IDR 47,109.5mn holds, the annual base for the dividend remains sufficient.

The risk to the dividend is a further decline in net interest income. If profit falls, the payout may be cut, and then the 14.1% yield would be history rather than a guide.

The portal model implies +17% upside to fair value

On the portal model, comparing ROE of 21.1% with P/B, the stock's fair value is 17% above the current price. This is a calculation based on current profit and equity, not a market forecast.

Upside of 17% at a P/E of 5.37 and a dividend yield of 14.1% makes the stock interesting for an investor willing to accept the risk of falling net interest income. The combination of a cheap valuation and a high payout is the main argument.

The model, however, rests on current profit. If the reported-period profit proves one-off, the calculated fair value falls with it.

The stock is held in the live Frontier AI Selection strategy – a fact, not an argument

ID_BMRI is held in the live Frontier AI Selection model strategy on the portal. This is a fact about the strategy's composition, not an assessment of attractiveness.

Inclusion in the strategy is determined by its own screen and does not replace analysis of the report. The verdict below is built on the report's figures, not on membership.

Valuation on the latest reported figures

Bottom line

The report's strength is profit: IDR 47,109.5mn for 9M, up 13.9%, with the share of profit in net interest income rising to 67.5% from 52.9%. But this was achieved with net interest income down 10.8%, and in Q1 2026 the decline was 1.8% after 5.5% growth a year earlier. The valuation is cheap – P/E LTM 5.37 against ROE of 21.1%, dividend yield 14.1%, and the portal model implies +17%. The verdict is rather attractive: the dividend and low multiple outweigh the risk of unsustainable profit, but confirmation requires seeing the fall in net interest income stop in the next report.