BBTN - Recorded a decrease in LAR ahead of the end of pandemic relaxation

BBTN - Recorded a decrease in LAR ahead of the end of pandemic relaxation Credit Restructuring Towards the end of credit restructuring relaxation due to COVID-19 in March 2024, a number of banks have succeeded in reducing the risky credit ratio. PT Bank Tabungan Negara Tbk (BBTN), for example, until Dec23, the LAR position fell to 21% compared to the previous year in the same period, which reached 24%. According to the bank, the largest contributors came from the subsidized and non-subsidized KPR segments. On the other hand, BTN has prepared sufficient reserves so that it is confident that this year's LAR will be able to fall below 18% and NPL coverage will be around 160%. (Source : Kontan). Comment : We believe BBTN will remain in a well shape condition by the time covid restructured credit relaxation fully lifted. Well enough coverage will overall help the bank operational and become as a solid foundation to overcome any latent drawbacks. We think ‘24F will become another solid year especially due to latest property sector policy which will benefit BBTN. Maintain BUY with GGM-based TP of IDR1,770, pegged at 0.6x ‘24F P/B.