Reasons Why BBRI Stocks Are a Solid Choice for Long-Term Investments

JAKARTA, Indonesia, Aug. 4, 2023

Agung Ramadoni, Head of Equity Investment at Berdikari Manajemen Investasi, emphasized that "BRI's buyback program is an indicator that the management believes in the company's future performance. Additionally, BRI's fundamental performance is a key factor for the banking sector to achieve profit."

In line with the 2023 Annual General Meeting (AGM) on March 13, 2023, BRI has allocated a buyback fund of up to IDR 1.5 trillion to be completed from March 14, 2023, to September 14, 2024, as part of the Employee and Director Stock Ownership Program (ESOP). Notably, BRI has been consistent in its buyback strategy for the ESOP program for two years, executing transactions amounting to IDR 2.99 trillion or 647.38 million shares from March 1, 2022, to January 26, 2023.

The program aims to engage BRI employees and directors, fostering motivation and a sense of ownership to enhance overall performance. BRI's President Director, Sunarso, stated that "Throughout this buyback, we have been very calculative, ensuring it will not affect our performance or future capital structure but rather strengthen it."

Agung further highlighted, "BRI's ability to improve efficiency is evident in the lower growth of operational costs compared to its revenues." BRI's net interest margin (NIM) rose to 7.8% in Q1 2023 from 7.7% in Q1 2022, and credit costs decreased by 198 basis points in March 2023 compared to the previous year. Additionally, the bank's return on average equity (ROAE) soared to over 20%.

Moreover, certain expenses saw a decline, with promotional expenses at only 8.1% YoY, totaling IDR 298.74 billion, and other expenses at 5.73% YoY, totaling IDR 7.39 trillion. Consequently, the operational cost-to-income ratio (BOPO) decreased from 64.26% in Q1 2022 to 60.7% in Q1 2023.

BRI's micro-credit dominant portfolio may sustain NIM in high-interest-rate conditions. Analysts project BBRI's stocks to potentially reach IDR 6,800 within a year, with an average value of IDR 5,975.