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Bank Negara Indonesia
- Bond: BBNIIJ 5.28 29
- Indicative Yield-to-Maturity (YTM): 5.385%
- Credit Rating : -/BBB/-
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Fundamental View
AS OF 17 Jun 2025Bank Negara Indonesia (BNI) is the fourth largest commercial bank in Indonesia by assets.
The bank is majority-owned by the Indonesian government (60%) and receives strong state support in the form of well-established relationships with SOEs, an area that the bank heavily loans to.
BNI’s asset quality has shown a steady improvement after COVID headwinds in Indonesia, mainly driven by its corporate loan book. It has de-risked its loan portfolio by focusing growth on top tier private corporates.
Business Description
AS OF 17 Jun 2025- Bank Negara Indonesia was founded in 1946, initially as a central bank, before becoming a commercial bank in 1968. It is now the 4th largest commercial bank in Indonesia by assets.
- The bank is majority-owned by the state (60%) and focuses its lending toward SOEs and domestic corporates.
- BNI's loan book is split 57% corporates, 22% small and medium enterprises and 19% retail, with the remaining coming from its subsidiaries at March 2025.
Risk & Catalysts
AS OF 17 Jun 2025Funding cost pressure from the tight liquidity environment remains a headwind, so NIM and loan growth will hence be a challenge this year.
While Indonesia’s growth is projected at a reasonable ~5% in 2025 and could pickup over the medium term under the Prabowo administration, shifting macro sentiment towards Indonesia over growth slowdown, weak state finances and policy uncertainty under the Prabowo administration could weigh on spreads.
We see governance risks as increased with the move of SOE banks including BNI to Danantara; we expect the payout of higher dividends to fund policies of the current administration. However, we are comfortable with the CET1 ratio dropping over time to the 14-16% range of other APAC banks.
Asset quality has trended better than peers due to its loan book and growth focus being predominantly on large corporates and safer retail. We see the probability of more state directed lending to projects that may not be the most commercially viable, but the effects would take a few years to play out.
Key Metric
AS OF 17 Jun 2025| IDR bn | FY21 | FY22 | FY23 | FY24 | 1Q25 |
|---|---|---|---|---|---|
| PPP ROA | 3.35% | 3.42% | 3.32% | 3.10% | 2.86% |
| ROA | 1.2% | 1.8% | 2.0% | 1.9% | 1.9% |
| ROE | 9.9% | 15.0% | 15.2% | 13.9% | 13.2% |
| Equity/Assets | 12.07% | 12.32% | 13.61% | 14.18% | 14.48% |
| CET1 Ratio | 17.4% | 17.5% | 20.2% | 18.9% | 19.7% |
| NPL Ratio | 3.70% | 2.81% | 2.14% | 1.97% | 1.96% |
| Provisions/Average Loans | 3.23% | 1.83% | 1.41% | 1.08% | 0.84% |
| LDR | 79.9% | 84.0% | 85.7% | 96.3% | 93.4% |
CreditSight View Comment
AS OF 30 Apr 2025BNI is the 4th largest bank in Indonesia by assets and is 60% government owned. It thus has well-established relationships with SOEs. Asset quality was weaker than Mandiri with a higher NPL ratio and credit costs, but its pivot to better quality segments since 2021 has borne fruit, and it continues to do that with a focus on wholesale and safer retail. Funding cost pressure from the tight liquidity environment remains a headwind and loan growth is a challenge this year. However, fundamentals remain sound with strong capital and asset quality, and decent profitability. We expect dividend payouts to increase, but would be fine with a 14-16% CET1 ratio. We have BNI on O/P as we see the 29’s as wide vs. SSEA peers, and also view the Tier 2 as attractive.
Recommendation Reviewed: April 30, 2025
Recommendation Changed: January 23, 2025
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