Company Coverage
Bank Mandiri (BMRI IJ): Share Pledge Clarified But Loan Details Remain Undisclosed
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rp4,000
Rp4,665
+16.6%
Rp5,150
Analyst
Highlights
- Share-pledge clarification offers reassurance, but exposure remains undisclosed. Additional collateral and stated LLL compliance provide comfort, while undisclosed facility size and repayment terms limit an independent credit assessment.
- Funding pressure and rising credit costs constrain earnings upside. Loan growth outpaces CASA, while NIM is likely to trough at 4.1% in 3Q26, with any improvement in 4Q26 dependent on liquidity conditions while CoC is moving towards the upper end of guidance of 60-80bp.
- Maintain HOLD; lower target price to Rp4,665. We raise CoE to 14.0% and lower our target P/B to 1.4x from 1.5x, reflecting elevated global bond yields as well as funding and credit-allocation uncertainty. Earnings forecasts remain unchanged.
Analysis
- JARR and PGUN share pledge: Reassurance with limited disclosure. Shareholders of Jhonlin Agro Raya (JARR) and Pradiksi Gunatama (PGUN) disclosed pledges representing 86.6% and 92.4% of the respective companies’ outstanding shares to Bank Mandiri (BMRI). In its subsequent clarification, BMRI stated that the facility was extended to the group behind these companies, rather than the listed entities themselves. The pledged shares supplement other primary collateral and identified repayment sources. Management also indicated that facility pricing is meaningfully above its Jun 26 blended corporate loan yield of 5.94% and group exposure remains well within the legal lending limit (LLL). These assurances provide some comfort, but undisclosed facility size, drawn amounts, tenor and loan-to-value limit an independent credit assessment. The pledged shares’ quoted market value may also differ materially from proceeds recoverable through a sale under stressed conditions.
- Liquidity remains tighter than headline ratios suggest. August loan growth of 17.6% yoy outpaced current account and savings account (CASA) growth of 8.2%, increasing reliance on time deposit and wholesale funding. At end-August, BMRI held Rp104t of government liquidity placement (SAL); excluding this, we estimate loan-to-deposit (LDR) at 101.0%, vs 94.4% reported. BMRI also had approximately Rp341t of repo, borrowings, interbank liabilities and securities issued, equivalent to 21% of loans. These sources provide funding flexibility but increase sensitivity to market conditions and rollover requirements. With subsequent government liquidity withdrawals in 2H26, stronger organic deposit growth or more moderate lending would help reduce replacement-funding needs..
Highlights
- Share-pledge clarification offers reassurance, but exposure remains undisclosed. Additional collateral and stated LLL compliance provide comfort, while undisclosed facility size and repayment terms limit an independent credit assessment.
- Funding pressure and rising credit costs constrain earnings upside. Loan growth outpaces CASA, while NIM is likely to trough at 4.1% in 3Q26, with any improvement in 4Q26 dependent on liquidity conditions while CoC is moving towards the upper end of guidance of 60-80bp.
- Maintain HOLD; lower target price to Rp4,665. We raise CoE to 14.0% and lower our target P/B to 1.4x from 1.5x, reflecting elevated global bond yields as well as funding and credit-allocation uncertainty. Earnings forecasts remain unchanged.
Analysis
- JARR and PGUN share pledge: Reassurance with limited disclosure. Shareholders of Jhonlin Agro Raya (JARR) and Pradiksi Gunatama (PGUN) disclosed pledges representing 86.6% and 92.4% of the respective companies’ outstanding shares to Bank Mandiri (BMRI). In its subsequent clarification, BMRI stated that the facility was extended to the group behind these companies, rather than the listed entities themselves. The pledged shares supplement other primary collateral and identified repayment sources. Management also indicated that facility pricing is meaningfully above its Jun 26 blended corporate loan yield of 5.94% and group exposure remains well within the legal lending limit (LLL). These assurances provide some comfort, but undisclosed facility size, drawn amounts, tenor and loan-to-value limit an independent credit assessment. The pledged shares’ quoted market value may also differ materially from proceeds recoverable through a sale under stressed conditions.
- Liquidity remains tighter than headline ratios suggest. August loan growth of 17.6% yoy outpaced current account and savings account (CASA) growth of 8.2%, increasing reliance on time deposit and wholesale funding. At end-August, BMRI held Rp104t of government liquidity placement (SAL); excluding this, we estimate loan-to-deposit (LDR) at 101.0%, vs 94.4% reported. BMRI also had approximately Rp341t of repo, borrowings, interbank liabilities and securities issued, equivalent to 21% of loans. These sources provide funding flexibility but increase sensitivity to market conditions and rollover requirements. With subsequent government liquidity withdrawals in 2H26, stronger organic deposit growth or more moderate lending would help reduce replacement-funding needs..
HOLD (Maintained)
Current price:
Target price:
Upside:
Previous TP :
Rp4,000
Rp4,665
+16.6%
Rp5,150
Analyst
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