Rancak Media – , JAKARTA — Analysts suggest that the planned share buyback by PT Bank Mandiri (Persero) Tbk. (BMRI) could serve as a refreshing catalyst for investors. However, they emphasize that the underlying fundamental aspects of the company will ultimately remain the primary driver for sustained investor confidence.
Frederik Rasali, an analyst at Artha Sekuritas Indonesia, highlights that Bank Mandiri’s current stock price is trading at a notably low valuation. With a price-to-book value (PBV) ratio of 1.57 times, BMRI’s valuation is recorded below minus one standard deviation over the past five years, indicating a potentially attractive entry point for investors.
“This signifies that Bank Mandiri’s shares are currently quite discounted,” Frederik stated in his commentary on Friday, November 28, 2025. He further drew parallels, noting that a similar valuation trend was observed in late 2021, a period when the stock market faced significant pressure due to the Covid-19 pandemic.
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According to Rasali, the share buyback initiative possesses considerable potential to bolster positive sentiment towards the state-owned banking issuer. This strategic move could signal robust financial health and management’s confidence in the company’s future trajectory.
He elaborated that a key function of this share repurchase program is to facilitate the ongoing Employee Stock Ownership Plan (ESOP). Through this mechanism, the company can directly buy back ESOP shares once they are executed and subsequently sold, streamlining the process and potentially benefiting employee participants.
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“However, beyond this operational utility, investor trust in BMRI shares is undeniably set to increase,” he added, emphasizing the broader psychological impact on the market.
Furthermore, Frederik observed that BMRI’s stock performance over the last year has exhibited a downward trend. This movement aligns with the broader challenges faced by the banking sector throughout 2025, largely attributed to pressures from the national economic conditions.
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“Once the economy achieves greater stability, the share buyback can act as a potent positive signal, encouraging investors to renew their confidence in Bank Mandiri’s operational performance and long-term prospects,” he asserted.
Nevertheless, Frederik cautioned that the psychological impact of such an action tends to be transient. Ultimately, he noted, investors will revert to evaluating the company based on its enduring fundamental strength, rather than being swayed by short-term price fluctuations.
He underscored the critical importance of scrutinizing both the allocated funds and the execution price of the buyback. These two factors, he explained, will be crucial determinants of the total number of shares that can be repurchased. A reduction in the outstanding share count will directly contribute to an increase in earnings per share (EPS), a key metric for investor value.
According to records from Bisnis.com on Tuesday, October 21, 2025, BMRI had already approved a buyback program valued at Rp1.17 trillion. This decision was formally made during the Annual General Meeting of Shareholders (AGMS) held on March 25, 2025.
The execution of this buyback is slated to occur both through the Indonesia Stock Exchange (BEI) and off-exchange mechanisms, with completion expected no later than 12 months following the AGMS.
Disclaimer: This news is not intended to encourage the buying or selling of shares. Investment decisions are entirely at the reader’s discretion. Bisnis.com is not responsible for any losses or gains arising from the reader’s investment decisions.
Summary
Analysts consider PT Bank Mandiri (BMRI)’s planned share buyback a potential catalyst for investors, though fundamental strength remains crucial for sustained confidence. The bank’s shares are currently viewed as undervalued, trading at a price-to-book value (PBV) of 1.57 times, suggesting an attractive entry point. This buyback is anticipated to bolster positive sentiment, signal robust financial health, and facilitate the company’s Employee Stock Ownership Plan (ESOP).
While the buyback could serve as a positive signal following a challenging year for the banking sector, its psychological impact is expected to be transient, with long-term investor trust hinging on fundamental performance. Bank Mandiri approved a Rp1.17 trillion buyback program during its March 2025 AGMS, slated for completion within 12 months. The effectiveness of this program, including its impact on earnings per share, will depend on the allocated funds and execution price, which determine the number of shares repurchased.
