PT Bank Mandiri (Persero) Tbk (BMRI) Earnings Call Transcript & Summary

Good evening, everyone, and welcome to PT Bank Mandiri's Third Quarter '25 Results Briefing. Thank you all for taking the time to join us today. My name is Laurensius, Head of Investor Relations. Joining with me -- joining me this evening are Ibu Novita, our CFO; Pak Tim, our Operations Director; and Pak Danis, our Risk Director. Before we get started, please feel free to download both our presentation materials and financial statements. They are all available on the Investor Relations web page of Bank Mandiri. [Operator Instructions] Once again, thank you for being here, and I would like to hand over the presentation to Ibu Novita, our CFO. [Foreign Language]

Thank you, Lau. Ladies and gentlemen, I would like to begin the presentation with a brief overview of the macroeconomic and [indiscernible] and Bank Mandiri repositioning. In September '25, the economy remained relatively stable in the third quarter with GDP growth expectation around 5%, supported by stronger investment activity. During the quarter, Bank Indonesia maintained its dovish stance, delivering a total 3 rate cut amounting to 75 basis points between June and September, bringing the benchmark rep down to 4.75%. We expect BI to maintain their dovish stance with 1 additional rep cut anticipated before year-end. As of September '25, we continue to outperform the industry in loan growth with gross expansion of 11.6% year-on-year, versus industry growth of 7.69%. On the deposit side, we show an improvement in the liquidity environment reflected in industry deposit growth of 8.5% year-on-year, while our deposit grew strong at 12.3% year-on-year. The improvement is driven by Indonesia's dovish policy direction and accelerated government spending during the period. Lastly, despite ongoing macroeconomic pressure, our asset quality remained robust with NPL ratio at 1.03%, well below the industry [ efforts ] of 2.28% at September '25. Now we will move on to discuss the key strength and challenges during the quarter up until September '25, we observed a notable improvement in our cost of funds, supported by a more optimized deposit pricing mechanism. Our asset quality also remained resilient despite ongoing macroeconomic headwind, reflecting prudent risk management and continued improvement in net -- NPL formation. We also delivered strong noninterest income. The growth during this quarter, supported by recurring fees growth of 23% quarter-on-quarter and treasury fees growth of 24% quarter-on-quarter further strengthening our revenue. On the [ talent ] side, we saw soften yield environment coming from competitive loan pricing in a declining benchmark environment, while our ability to price higher yielding loans remain limited, improvement in funding costs and liquidity conditions have allowed us to maintain NIM stability. Retail loan growth remained modest, with 5% year-on-year growth in 9 month '25 as we deliberately maintained a prudent stance amid softer retail economic condition. We expect retail loan growth to improve in fourth quarter, although the growth will remain selective and focus on value chain-based lending. OpEx growth remained elevated continuing from the previous period due to the post audit adjustment. However, our internal efficiency initiatives helped maintain consolidated OpEx growth stable at 25% year-on-year with consolidated cost-to-income ratio [ remains ] flat at 44.6%. As a result, in 9 month '25, our consolidated loan growth grew by 11% year-on-year above our guidance level. Our net interest margin also managed within our guidance level with 9 months '25 at 4.89%. Our provisioning remains ample with current level at 73 basis points better than our guidance of 80, up to 100% basis points. As of September '25, we recorded a solid consolidated loan growth of 11% year-on-year, supported by an encouraging quarterly increase of 3.71%. The expansion was primarily driven by wholesale segment, which is 14.7% year-on-year, while retail growth remained modest at 4.57% year-on-year. During the quarter, corporate loans grew strongly by 8.19% quarter-on-quarter, followed by commercial loan at 1.92% Q-on-Q. Growth within this segment was directed towards the real sector, particularly Energy & Water, downstream-related industry and telecommunication, in line with our commitment to support sustainable economic growth. Given the soft macro environment, we have -- emphasized growth in the broader retail segment to focus more strategic portfolio. In the retail segment, we are focusing on the value chain retail pipeline with micro KUR grew by 2.89% Q-on-Q and mortgage increased by 0.78% Q-on-Q. Meanwhile, we continue to prudently manage our exposure in auto loan, negative 3% Q-on-Q. SME loan negative 1.7% Q-on-Q and payroll loans negative 0.5% Q-on-Q as part of our growth strategy under current macro condition. Going forward, we expect retail disbursement to gradually improve in fourth quarter '25, supported by stronger demand recovery, while maintaining a tighter focus on ecosystem driven segment. Entering 2026, we expect slightly stronger overall loan growth, driven by improvement macros in demand, project execution in the real sector and deeper financing along key value chain. Now let us move on to profitability metric of the bank. Overall, in September '25, our net profit reached IDR 37.7 trillion, down by 10.2% year-on-year, while PPOP remained solid at IDR 61.9 trillion, down by 7.4% year-on-year. Our net interest income still post encouraging growth of 4.90% year-on-year. Noninterest income increased 7.97% to IDR 33.2 trillion and revenue grew by 4.79% year-on-year despite OpEx growth of 25.3% year-on-year. On the lending side, we maintain a disciplined spend. Our consolidated loan portfolio grew by 11% year-on-year to IDR 1,764 trillion. In parallel, we continue to strengthen liquidity with CASA deposit rising 5.97% year-on-year to IDR 1,305 trillion, supporting balancing its stability. Improved liquidity contributed to a 4 basis point decline in CASA deposits compared to the previous quarter, bringing it down to 2.40%. On the other hand, loan yields stood at 7.67%, resulting in a stable NIM of 4.89% as September '25. Risk discipline remains a key strength. Cost of credit improved to 73 basis points, reinforcing asset quality and overall balance sheet resilient. ROA, return on assets, stood at 2.02%, while return on equity remained robust at 18.4%, underscoring our consistent ability to deliver healthy and sustainable return amid a challenging operating environment. Next is our margin performance. Our NIM remained resilient through the third quarter of '25. As of September, NIM stood at 4.89%, relatively stable compared to the 4.92% in the previous quarter, despite some pressure on the loan yield. Loan yield slightly declined to 8.26%, mainly due to increased competition in retail segment and a broader decline in benchmark [indiscernible]. The softer yield environment still continues as our Mandiri figure stood at 8.21% in September '25. Our cost of Funds improved with 9 months '25 at 2.43% from 2.46% in the first half of '25. The improvement continued as our month to date September '25 cost of funds stood at 2.33%, supported by better deposit mix management and a reduction in [indiscernible] deposit. While we continue to see softening loan yields, the overall positive trajectory of our cost of funds should support the margin stability for the remainder of the year. Consequently, we expect NIM to remain stable within our 4.8% up to 5% full year '25 guidance range. Going forward to '26, we see additional room from cost of fund improvement as rate normalization progress and CASA driven deposit continue to strengthen our funding base. Liquidity conditions are also showing sign of stabilization, providing a supportive backdrop for NIM performance. We remain encouraged by the ongoing improvement in funding costs and are cautiously optimistic that when yield pressure moderates, there could be upside potential for NIM next year. Let us turn on noninterest income and operating expense. At September '25, total noninterest income grew by 7.97 year-on-year, driven by strong treasury income and recurring fee income from both digital and nondigital channel, which delivered double-digit growth. We expect the noninterest income growth trend to strengthen further towards year-end, supported by a certain momentum in recurring income and the realization of our cash recovery pipeline. Approximately 40% of total full year '25 cash recovery are expected to be realized in fourth quarter '25, primarily from the wholesale segment. Looking ahead to '26, we anticipate continued solid growth in noninterest income, supported by the monetization of our digital initiatives, particularly from Livin' and Kopra. This development are expected to serve as an incremental growth drivers beyond the recurring fee base, reinforcing our long-term focus on digital ecosystem value creation. On the cost side, we saw an improvement on OpEx as operating expense growth declined by 1.34% Q-on-Q. This reflects our active efficiency measure and the gradual normalization of operational activities, resulting in our consolidated tier to remain manageable at 44.6% in 9 month '25. Overall, CIR and OpEx growth are expected to remain at the current level for the remainder of the year. With normalization underway, we expect OpEx growth to be flat or slightly lower next year, while CIR is projected to normalize to the 42% range on a consolidated basis. As of September 2025, loan at risk improved slightly to 6.48% while cost of credit remained stable at 73 basis points, reflecting a disciplined and well-managed portfolio. Loan at risk coverage remained strong at 44.7% on a consolidated basis and 42.5% for bank only, both above pre-COVID level, providing a solid buffer against downside risk. Our NPL coverage also remained robust with bank-only coverage at 271% and consolidated coverage at 243% as of September '25. We remain confident in sustaining healthy asset quality through '25, supported by continued improvement in net NPL formation trend up September '25. Ladies and gentlemen, allow me to walk you through our consolidated financial highlights. As stated earlier, our loan portfolio grew by 11% year-on-year, supported by stronger loan demand in third quarter, resulting in an overall asset growth of 10.3% year-on-year. On the liability side, the total deposit increased 13% year-on-year, outpacing the industry deposit growth of 8.51%. Our CASA growth remained solid with 5.97% year-on-year, while time deposits grew by 32.8% year-on-year to support our sustainable liquidity strategy. Looking ahead, our '25 loan growth remain on track within the guidance range, supported by ongoing growth in the wholesale segment and steady recovery in retail demand. Entering 2026, we anticipate a more supportive demand environment than 2025, reflecting macro recovery momentum, accelerated government investment and more accommodative liquidity and rate environment. Now moving to the P&L side. Total interest income grew by 10.5% year-on-year with interest expense growth of 22.2% year-on-year, resulting in a maintained NEE growth of 4.90% year-on-year. Our noninterest income grew by 7.97% year-on-year, supported by both recurring and nonrecurring fee bringing total revenue growth to 4.79% year-on-year. On the cost side, as previously mentioned, operating expense increased 25.3% year-on-year leading to a 7.42% year-on-year decline in the PPOP. Bottom line, our 9-month '25 net profit declined by 10.2% year-on-year to IDR 37.7 trillion. Looking ahead, we expect profitability to improve gradually supported by stable margin, encouraging noninterest income and normalizing cost growth. With this factor, we remain confident that our ROE will improve progressively moving towards the 20% target in the medium term. We maintain our -- lastly for the guidance, full year '25. We maintain our loan growth guidance at 8.10% year-on-year supported by expectation of stronger loan demand in the remainder of the year, underpinned by higher government spending and Bank Indonesia's continued office policy stance. We are optimizing our portfolio mix to enhance profitability by expanding investment loan relative to the working capital loan. In addition, we continue to align loan growth with deposit expansion through our loan follow deposit strategy, ensuring prudent liquidity management. Our focus remains on the ecosystem value chain segment, and several sector consistent with our internal portfolio guideline. With improving cost of funds in 9 month '25 and expectation of further system-wide liquidity enhancement, we anticipate NIM to close the year within our guidance range. On asset quality, we expect net NPL formation to continue to decline, supported by our prudent approach in the retail segment and our [indiscernible] growth strategy. Accordingly, we expect cost of credit remain ample for '25. Now I would like to hand the presentation to Pat Danis, our Risk Director, to explain more about the asset quality. Please Pak Danis.

Thank you, Ibu Novita. Ladies and gentlemen, allow me to provide an update on our asset quality as of September 2025. In that way, in line with our conservative loan growth strategy, asset -- our asset quality remain resilience, reflecting disciplined underwriting amid a challenging macro backdrops. In September 2025 loan at risk improved to 6.48% supported by selective growth in positive sectors within the wholesale segment and targeted expansion through our ecosystem, value chain and retail. Going forward, -- going forward, we expect LaR to remain stable at around 7% through year-end with NPL formation manageable across both wholesale and retail segment. We remain well provisioned with consolidated LaR coverage of 44.7% and NPL coverage ratio of 243% providing a solid buffer against [indiscernible]. Consequently, our cost of credit or COC stood at 0.73% in the September below our full year guidance. Looking ahead, we are confident in maintaining healthy asset quality, underpinned by robust risk management and the strength of our [indiscernible] strategy, which drive high-quality growth. Lastly, let us discuss our capital positioning. As of September 2025, Bank Mandiri's capital adequacy ratio or CAR improved to 19%, primarily reflecting a higher dividend payout ratio. Looking ahead, we aim to maintain CAR at -- CAR and Tier 1 in the 18% to 20% range over the near to medium term, balancing capital efficiency with sustainable growth. And now I would like to pass the presentation to Pak Tim, our operations directors to continue in the presentation on our digital and ESG performance. Please, Pak Tim.

Thank you, Danis. Good afternoon. I think for those that have been following us, this is going to be an update where I'm just going to underline some of the items that have been mentioned by Ibu Novita, in particular, why we are driving all the transactional capabilities through our digital initiatives. So the first one that I'm going to update is the performance of Livin'. I'm very encouraged to say that we have continued to position Livin' as the primary gateway for our retail transactions. And the important piece to underline is the double-digit growth throughout as a transactional platform for retail clients. We can see that the users are continuing to grow, still double digit with users touching 35 million now. Following that would be the transactional frequencies and value. So you can tell that from the bottom numbers, that our clients are highly engaged. In my view, with numbers that are north of 90%, touching, in some cases, close to 100%. This is almost near optimal in the way we drive the transactional platform. So I think towards the end, as Novita mentioned earlier, the actual game for this is going to be twofold. One is the balances where we can see 87% of saving balances already linked to Livin'. But more importantly, we can see the strong growth in the fee base as you can see on the chart. Next, just -- I think from a Livin' perspective, we have pretty much built strong use cases in features, so that we can answer all the banking needs, payments and lifestyle and really has become the super app for daily life for our clients. There is a model on the left, as you have seen before in terms of how we position to become a strong transactional capabilities to gain significant traction. I'm just going to name a few there where the QR payments, for example, has actually surprised ourselves where the growth has been phenomenal from where we were before to where we are today, even this year, it has gone up almost 7x. Livin' mortgage has taken off. We have seen a 2.5x growth. Mutual funds continue to be strong with our investment capabilities as well as stocks. What is quite important on the retail lending side, we see also other mortgages, we see also that's going to be growing significantly through our ecosystem. Cross-border remittances, we are probably one of the most complete. It's grown significantly higher, almost 9.5x with almost -- complete currencies that can serve the -- foreign currency, that can serve our clients. Next, I think this is where the slide is going to be very important to understand why we are driving all of that. If we break down the client base that we have, what is really driving the fee-based incomes obviously, would be the transactions. Hence, the features that we built and you can see that as the clients grow stronger, the users as we move to the right, what we call from the committed, consistent and explorer types, we can see that the more they are more engaged with us, 30% of them now are highly committed, and they drive the FBI strongly. So obviously, for us to build this super app is to continue to push. So we see more committed clients that are using the app for their daily needs that will contribute strongly to the fee-based income that we continue to see double-digit growth since the launch of the platform. Next, I'm just going to move to the other part, what we have discussed earlier has been Livin' for the end users. Now we're going to move to Livin' merchant, where on the other side of Livin' users, these are the merchants. As we know, Indonesia has got [indiscernible] that has about 67% of the GDP of Indonesia. So Livin' merchants since the launch in June '23, we have now touched 3 million users. So this is actually complementing the engine that we have in Livin' for end users. Now we really move to merchants to provide the right solutions. And the fastest onboarding, free subscription, now real time settlement, so therefore micro players, they can see their money straight in their accounts as soon as payment is done. The activities has picked up significantly, as you see in these 2 charts. But more importantly, I think now we can confidently say that the transactions has doubled -- almost doubled at least 1.9x of our existing EDC solutions that we have offered in the market. So again, this is showing great traction for our merchant side that where we are leveraging the ecosystem. Next, I'm just going to move to our Kopra side. This is our platform for corporates. The same way that we position Livin', this has become the largest wholesale platform in the country. Volume-wise, I think we are touching almost IDR 19,500 trillion for the 9 months. And to -- and this is continuing the double-digit growth since the launch. And the current account balances continue to grow for our wholesale players. Next, again, I think similar concept to -- next page, similar concept to Livin'. What we want to drive is going to be the engagement in a similar fashion that we see in Livin'. Kopra similarly have the same concept, hence, the use cases and the experience that we built. What's quite important to note here is the more engagement we see, i.e., what we call the highly engaged clients that we have, the balances that we see are significantly higher. Hence, this platform going to be continued to improve where we're going to look for balances with high engagement. We have a complete set of platform where we provide liquidity management, proactive collections, even now a distributor ordering platform, so this, we believe, as we've reported before, our corporate platform has been benchmarked to the best global platforms that are offered by global banks. Next, I think the last launch -- launch of features that we did where these are 2 important products where in Kopra now, clients can do time deposit creation themselves without even contacting the bank. And then if there is a need for working capital, pledging these deposits because there's a use case that we see strongly here. Clients can do it straight away. So this is going to be very seamless and easy to create, to support our client needs. Next, I'm just going to bring you back again, linking all the different platforms that we have, be it retail and wholesale. As you all know, that we are a wholesale player with a strong ecosystem all the way down to retail side. So we have the ability now to combine co-prime Livin' merchant, where all our smaller merchants can actually be linked to the larger corporates for their needs. For example, if it's FMCG, they can do their ordering and payments there. Livin' end users and Livin' merchant, again, these are being combined, and we can even push for the different invoices and all that from Livin' into Livin' Merchant. Similarly, Kopra to Livin' end users, we can do collections and all that. So what we are saying here is all our platforms that we have built, they are interconnected. They are in the same platform where we can see usage for our clients to make their day-to-day cases easy. Next, I'm just going to show that I think these days, you don't talk about technology without talking about AI. So we have progressed very strongly. We run 7 petabit of data. We have 200 billion of data records. We have dedicated data scientists that we've mentioned before, but those data scientists are driving 3 things in the bank, productive improvement, revenue growth and better risk management. These are the right use cases that AI and machine learning and data analytics are driving. What is quite important, we have been recognized externally, where our investment for AI and machine learning has been aligned with good practices in the market. So that would be the end of my update for digital. Let me move quickly now to ESG. ESG has been a core piece of the bank and what is important, I'm very proud to update that we have been recognized by the international stakeholders, especially for our ratings by Sustainanalytics, where we have significantly improved the rating from previously medium rating, 27.6, as far as the score is concerned, down to 9.5, which is on the low rating. That means, I think, in the span of a very short period of time with our consistency of executing our strategy, we have today become the lowest ESG risk rating compared to all the other larger banks in Indonesia. You can see from the chart. We are executing, obviously, using our strategy where we want to consistent with our vision to become the Indonesia sustainability champion and that framework is being executed through sustainable banking, sustainable operations and sustainability beyond banking, and governance, obviously. You can tell that in the last -- all the activities where we have done have contributed to lowering the risks to a low score now. Next, I'm just going to briefly touch from the sustainable banking perspective. Mandiri remains committed. Our sustainable asset growth portfolio has shown a strong 8.7% year-on-year increase to IDR 310 trillion, led by the green portfolio, which is showing a very strong uptick of 12% and social trailing behind that. This is again our commitment to improving the ESG portfolio for the bank. The green portfolio, Bank Mandiri actually holds -- remains the leader in the green portfolio as compared to the 3 other banks, as you can see on the chart. As far as green portfolio as well, our market share is the highest. So I'm just going to move quickly to the last page. We want to say that from the sustainability of operations and sustainability beyond banking, we continue to drive improvement. And not only that, also on the gender diversification, we remain committed to delivering all the commitments that we have put out before. With Beyond Banking, we will -- we have actually in line with our SDGs or sustainable own goals, we have committed with the promoting, the inclusivity using our digital capabilities that we have, in particular with Livin' merchant. So that would be the end of my presentation. I'll hand it back to Lau for the next session. Thank you.

Great. Thank you, Tim, and thank you to all speakers for the opening. We will now move on to the Q&A session. [Operator Instructions] There are a set of questions coming from, I think, JPMorgan. Harsh, if you could ask the questions live, that will be appreciated. Thank you so much.

So the first question is on the liquidity that came in. How much was [indiscernible].

Sorry. Harsh, we couldn't hear you at the start. Can you repeat the question?

Yes. Can you hear me well now, Lau?

Yes, we can now.

Great. So the IDR 55 trillion liquidity that was -- that came into the bank, how much was lent out? And the remaining, which was not lent out, where has that money been deployed? That's the first question, and I'll go one by one.

Okay. That's the first, okay. So that's the first question. I think Novita will take that one.

Thank you, Harsh. So the IDR 55 trillion liquidity injection right now, as stated on the agreement, it's debt as a pool of fund. So we can use the IDR 55 trillion disburse our loan right now. And the duration of this IDR 55 trillion is, Ministry of Finance states that it will be 6 months, and we place it as a deposit on call. Deposit on call is on deposit criteria in our third-party funds. So this is the reason why our time deposit increased significantly this third quarter. And the rate is around 3.8% -- 8.3 % because of -- the rule is 80% of the BI right. And then the liquidity injection, we already disbursed around 70% of the IDR 55 trillion already disbursed. And the majority goes to the real sector, which is including energy, electricity, water transportation, et cetera.

Right. And when you say deposit on call, are you receiving any interest on that? Or you're not receiving any interest?

No, it's -- the deposit sits as a liability. So we are actually paying on top of that deposit. And the cost of funds, so basically, that extra liquidity of IDR 55 trillion, 70% is being disbursed. The remaining that is still sitting in the balance sheet with the bank is sitting at 3.8% cost of funds, which is not a bad thing considering that we have a lot of special rates that are actually costing us quite meaningfully higher than 3.8%.

No, I understand that. So you are paying 3.8% on that, but that money, where have you kept it, the 30% which is not lent out...

Yes. So that money sits on the reserve, where we actually -- where we actually do not basically receive much of an interest rate as in yield. So technically, yes, we need -- or we are supposed to basically dispose this as soon as possible so that the liquidity doesn't sit on a negative carry.

Right. But hopefully, you are unwinding some of the higher cost deposits.

We are. We are.

Yes. Makes sense. And thanks for the disclosure on the September month-to-date yield and cost, that is very useful.

Sorry. Harsh, just to add the figures that we mentioned earlier are figures as of September 2025. So as we speak now, some of that have been unwind.

Yes. Yes. And second is on LDR. If I look at your NSFR number that has already gone down to 110%. And if I look at last 5, 10 quarters, 109% NSFR is where you tend to bottom. So the question is, can LDR move up meaningfully from here or probably not by, let's say, for December quarter?

For the LDR, our guidance is around 93%. And as ever, we want to maintain above 100% and the reason why we want to keep 93% is because we want to balance between the liquidity condition and the cost of fund. So the IDR 55 trillion -- we can use the IDR 55 trillion that have a 3.8% to replace our special rate deposit, so we still want to maintain 93% by the end of this year.

Great. Last one, the NPL guidance, coverage guidance is for 230%. So shall we assume that you will use the excess loan loss reserves and get NPL ratio -- coverage ratio down to 230% by end of this year?

230% is on the sustainable longer term. And our guidance is in terms of cost of credit, we want to maintain 80 up to 100%. And if we -- sorry, 80 up to 100 basis points and based on our assessment, we do not expect any surprise on the NPL side by the end of this year, so we can maintain the coverage level by the end of this year, it's above 250%. Yes, around 250%, Harsh. Cost of credit, 80 up to 100 basis points.

Yes, I think there's a question in the chat box from UOB, Sebastian, the question about the IDR 55 trillion additional liquidity. I think we've answered that question. So we can skip that. And -- okay. Yes. So I think there is an extra sort of follow-up question as regard to the IDR 55 trillion liquidity disbursement to what sector and whether or not we have changed our underwriting criteria. Maybe Ibu Novita can elaborate on that one.

Yes. In terms of risk appetite and underwriting standard, there is no change. We still focus on our latest portfolio guideline and our risk appetite statement also. And what is the difference this time, by IDR 55 trillion already in our balance sheet is, the liquidity injection can lower our cost of fund. So it's helped our strong loan growth.

Great. Thank you. I think we have a question coming from Jayden Vantarakis, Macquarie. If you could please ask the question live. That will be appreciated. Thank you.

Management team, can you hear me, okay? .

Yes, we can hear you.

Okay. Great. I just wanted to understand a little bit better on the quarter-on-quarter movement in the operating expenses. It looks like there was quite a large pickup in employee-related both at the bank and the subsidiaries and the promotion expenses were down. So it looks like the overall costs were sort of stable. Can you give us some background as to why the employee expenses were taken at this time? And what's your view on absolute costs as we get into the year-end and also early next year? We see the normalization we talked about last time.

Jayden, so our Q-on-Q, yes, we see -- we do a lot of efficiency activities. And remember that the June number is onetime, so the number is quite big on the first time. And then after quarter-on-quarter, month-on-month, we will normalize all of the costs in terms of report.

Yes. Maybe just to add, Ibu Novita, is in basically, if you look at the quarterly trend, Jayden, you'll see that there is -- or somebody can you please share the screen. You'll see that there is a Q-on-Q growth on the personnel expense. The table, the OpEx table. Q-on-Q growth on the personnel expense, 27.8%, but there was also a decline in the G&A and other expense, 18% and 35% Q-on-Q. So this, as Ibu Novita mentioned, is related to the one-off. The one-off that essentially came from initially capitalized costs across a certain period of time, that is to be recognized entirely in 2025. In the second quarter, a bit of that came from G&A and other expense. In the third quarter, there is part of that coming from the personnel expenses. But in general, we would suggest to look at the 9 month '25 and the trend towards the end of the year, where we want to keep the total OpEx growth of '25 stable until the end of the year. And this will normalize next year, which means that the OpEx growth next year can be actually zero, or actually negative depending on the situation, but OpEx will be down quite meaningfully in -- sorry, will be flat in terms of growth in 2026.

Okay. That's clear. So 25% through the rest of the year, and then we're seeing some normalization. Thanks for the guidance.

We have a question coming from Linda from [indiscernible]. Could you please ask the question live that would be appreciated. Thank you.

I just want to ask with regards to [indiscernible]. I know there are still a lot of unclarity -- is not as yet clear, but I just want to know whether you have any [indiscernible] with regards to the disbursement timing as well as borrowing rates and the cost of fund and the cost of credits as they are a bit often noises on the ground with regards to that?

Thank you, Linda. Well, tough question. Unfortunately, anything related to [indiscernible] at the moment is still under discussion. So there is -- we'll wait and we'll see the development of the progress and discussion as regard to the [indiscernible] and we'll update you as soon as we get any final sort of format of the program.

Sorry, just to follow up on that. But just for this year, is there any direction so far?

Direction in term of?

In terms of the amount disbursed -- that has to be disbursed for this year.

There is a direction to discuss and to have a dialogue regarding the program and that encompass disbursement and risk assessment and all other governance-related sort of stuffs. And all of that is part of the still undergoing discussion that we mentioned earlier.

I'll just wait for your updates then.

Thank you. Yes, we'll update you as soon as we get the final color on this one. Maybe -- so I think we have a question from Goldman Sachs. Melissa, can you ask your question?

I just have 2 questions. Firstly, on your margins. We saw some news article regarding government. One for you to push down in terms of lower loan yields. I think you talked about the BI meeting as well for the transmission to happen. And also, they talk about certain sectors where if you cut the yield, you can have lower in terms of your [indiscernible]?

Sorry. sorry, Mel. We were not able to hear the question clearly. Apologies.

Okay. Can I try again? Can you hear me?

Yes, we can. Yes.

Okay. So in terms of margins, how do you think of it, given the government's push to lower the loan yield as they inject the liquidity? Secondly, there's also articles out regarding like if you lower loan yields for certain segments, you get RRR relief. So how would that you think will impact your NIM going forward? And are you able to control it with lowering deposit costs at a much faster pace? Then on my second question, in terms of your dividend, I guess, if you look at your numbers in terms of your net income today, it's down. We know that you won't be paying out as much as you were last year, given that that's not -- that's kind of capital consumptive. But in fact, like what do you think you have to do in terms of your payout range this year so we can get a sense of where DPS will be?

Okay. I think the second question was about dividend. Mel, just confirming.

Yes, dividend. In terms of your payout for this year, given your net income is in decline.

Yes. On the -- I think on the net interest margin side, one of the reasons why we've been very cautious and conservative in setting up our range which for this year is 4.8% to 5%, and with some hope of recovery in 2026, but we still want to be also conservative there. It's actually mainly on the yield side of the equation, not really a function of being pushed to bring down yield, but just the macro environment. So for instance, for the corporate segment, we are faced with the overall declining benchmark rate. That is a natural that will bring a natural impact to the yield of our corporate book. On the other hand, for the retail book, the macro environment will dictate the overall yield. Macro and competitive environment will also overall -- take the overall yield. One thing that we are pretty confident to see is actually the improvement of cost of fund. So we have a big hope and we actually do expect that with the overall injection of liquidity from the government and also the net releases of liquidity from the Central Bank into the system, that will help with the cost of funds, and we are actually seeing cost of funds coming down so far. But the NIM trend challenge is -- going forward is actually more towards the yield side of the equation. So for now, we would prefer to keep stability and a stable NIM trend as a direction, so guiding for 4.8% to 5% range that we're keeping for this year and potentially similar sort of range that we want to keep at the moment for 2026. That's on the NIM side. As regard to the dividend, we believe that our comfort level for dividend is 60% payout ratio. That is the level that we would like to basically communicate to our shareholders. There is also another element to dividend that we are actually considering and that is the interim dividend. We would like to study and assess global standards and also global practice as regard to dividend payment. And we believe that potentially as we move forward, interim dividend could be actually a way to also sort of reward our investors. So that's something that we can work on. But as regard to dividend payout and all that, we are comfortable with 60%, we have a range of 60% to 70%, but 60% is the level that we want to keep. And that is something that we would like to propose to our shareholders. But obviously, at the end of the day, dividend payment will be highly dependent on the requests from the ultimate shareholders.

Can I just also check if share buyback can be an option for you?

We have a share buyback approved in the previous AGM in March 2025 and that is still applied all the way to 2026 March. So yes, absolutely, share buyback is still part of our -- is still on the table and is still there for us to execute. I think considering time, we'll open for one last question from Calvin, Schroders. If you could please ask your question live. That would be appreciated.

Can you hear me?

Yes, we can hear you.

I was just wondering, just to get a sense of the color for the cost of fund, how big the wholesale -- our wholesale deposits with a rate above 3.8% was prior to the IDR 55 trillion placement from the government?

So the overall cost of funds has come down as a result of this additional injection of liquidity, which we use as a momentum to reassess, revisit and renegotiate existing balance of deposits that we have that earlier sits at special rates. So clearly, the impact has been positive so far. As regard to what is the level of higher than 3.8% cost of funds deposits that we have today, if that's okay, we'll get back to you, Calvin. Actually, we'll just send across e-mails across all the participants today, but we'll have to double check first. And with this last question from Calvin marked, the end of the analyst meeting. Thank you very much. If you have further questions, feel free to e-mail and reach the Investor Relations team, we'll do our best to respond to your question as soon as possible. Thank you, everyone. Have a good rest of the evening.