Company Coverage
Bank Mandiri (BMRI IJ): 2Q26: Strong Earnings, But NIM Pressure Persists
HOLD (Maintained)
Current price:
Target price:
Upside:
Rp4,130
Rp5,150
+24.7%
Analyst
Highlights
- Headline earnings remained resilient, but core earnings softened. 1H26 earnings grew 24.4% yoy, supported by lower provisions and strong noninterest
income, while NII and PPOP weakened qoq amid ongoing margin compression.
- Loan growth remained strong, but profitability deteriorated. Gross loans rose 19.2% yoy, driven by corporate lending. Lower loan yields and a weaker
funding mix compressed NIM, leading management to lower its 2026 NIM guidance.
- Maintain HOLD with an unchanged target price of Rp5,150. Healthy asset quality and disciplined execution continue to support earnings, but persistent NIM pressure, funding competition and policy-related uncertainty limit upside at current valuations.
Analysis
- 2Q26 earnings remained resilient, supported by non-core earnings. Bank Mandiri’s (BMRI) net profit increased 33.5% yoy (-2.3% qoq) to Rp15.0t in 2Q26, bringing 1H26 earnings to Rp30.4t (+24.4% yoy), broadly in line with expectations. Earnings growth was driven by strong non-interest income, lower operating expenses and a 12.5% yoy decline in provisions, while preprovision
operating profit (PPOP) rose 19.9% yoy in 1H26. However, earnings quality was weaker than the headline growth suggested, as core income momentum softened. Despite a 19.2% yoy loan growth, net interest income (NII) grew only 8%, and declined 8% qoq, leading to a 4.6% qoq drop in PPOP.
Highlights
- Headline earnings remained resilient, but core earnings softened. 1H26 earnings grew 24.4% yoy, supported by lower provisions and strong noninterest
income, while NII and PPOP weakened qoq amid ongoing margin compression.
- Loan growth remained strong, but profitability deteriorated. Gross loans rose 19.2% yoy, driven by corporate lending. Lower loan yields and a weaker
funding mix compressed NIM, leading management to lower its 2026 NIM guidance.
- Maintain HOLD with an unchanged target price of Rp5,150. Healthy asset quality and disciplined execution continue to support earnings, but persistent NIM pressure, funding competition and policy-related uncertainty limit upside at current valuations.
Analysis
- 2Q26 earnings remained resilient, supported by non-core earnings. Bank Mandiri’s (BMRI) net profit increased 33.5% yoy (-2.3% qoq) to Rp15.0t in 2Q26, bringing 1H26 earnings to Rp30.4t (+24.4% yoy), broadly in line with expectations. Earnings growth was driven by strong non-interest income, lower operating expenses and a 12.5% yoy decline in provisions, while preprovision
operating profit (PPOP) rose 19.9% yoy in 1H26. However, earnings quality was weaker than the headline growth suggested, as core income momentum softened. Despite a 19.2% yoy loan growth, net interest income (NII) grew only 8%, and declined 8% qoq, leading to a 4.6% qoq drop in PPOP.
HOLD (Maintained)
Current price:
Target price:
Upside:
Rp4,130
Rp5,150
+24.7%
Analyst
IMPORTANT NOTICE - DISCLOSURES AND DISCLAIMERS
This report is provided subject to, and must be read together with, the full Disclosures / Disclaimers available at the following link: https://research-api.uobkayhian.com/assets/disclaimer/df64a6ea-7980-447c-ae9e-fd19b93257dc, which are incorporated by reference into this report. In particular, this report is intended for general circulation and informational purposes only and does not constitute personal investment advice or a recommendation to buy or sell any investment product or security. You should independently evaluate the information and, where necessary, seek advice from a qualified financial adviser regarding the suitability of any investment. Analyst certifications required under applicable regulations, including SEC Regulation AC (where relevant), are included in this report. By accessing, receiving or using this report, you acknowledge that you have read, understood and agreed to be bound by the Disclosures / Disclaimers, as may be amended, supplemented or updated from time to time.
