BBNI - Released its 9M24 financial performance

BBNI - Released its 9M24 financial performance Bank Negara Indonesia (BBNI) reported 9M24 financial performance. Interest income grew 7.3% yoy, while interest expense up 35.3% yoy. Net interest income drop 5.5% yoy and PPOP improved 3.6% to IDR25.28 tn from IDR26.24 tn in 9M23. Provision expenses also recorded better by 19.7% from IDR6.71 tn to IDR5.38 tn in 9M24. IN the same period net profit grew by 3.5% yoy. Total loans increased 9.5% yoy while total TPF recorded 3.0% yoy higher. Net interest margin arrives at 4.4%, while gross NPL and CoC stood at 2.0% and 1.0%, respectively. (Source : Company) Comment : BBNI's 3Q24 PATMI of IDR5.61 tn aligned with our forecast of IDR5.60 tn and exceeded the consensus estimate of IDR5.22 tn. The bank maintained its robust loan growth momentum, expanding by 9.5% yoy, slightly below the industry growth of 10.4% yoy but within the bank's 2024 guidance range of 10-12% yoy. While total third-party funds (TPF) grew modestly at 3.4% yoy, reflecting the tight liquidity environment, the bank's CASA deposits grew by a healthy 5.5% yoy. Additionally, the decline in time deposits by 2.6% yoy further strengthened the bank's deposit mix and is expected to positively impact its net interest margin in the following quarters. Key financial ratios exhibited significant improvement. NIM expanded to 4.4%, exceeding the previous quarter's 4.0% and aligning with the bank's 2024 guidance of ≥4.0%. Risk metrics remained manageable, with gross NPL and cost of credit (CoC) at 2.0% and 1.0%, respectively, in line with BBNI's 2024 guidance of +/- 1.0% for CoC. Maintain BUY. We will roll over our valuation to FY25. Our current GGM TP of IDR6,530 is pegged at 1.4x ‘24F P/B, while currently trading at 1.2x ‘24F P/B or at its average historical mean.