Banking Sector - Strong 9M23 results providing cushion for ‘23F/’24F performance

KBVS Update
Wednesday, 15 Nov 2023

Banking - Strong 9M23 results providing cushion for ‘23F/’24F performance
(Maintain Overweight)

•    Banks under our coverage 9M23 earnings grew by an average of 22.3% yoy to IDR27.9 tn, driven by healthy PPoP growth of 12.1% yoy and sharp drop in provisions by 19.3% yoy as asset quality improvement remains intact.

•    Loan growth momentum continues (12.0% yoy), beating industry Sept23 total loan growth and came in at the upper range of government ‘23F loan growth guidance. *Total TPF grew by an average of 8.6% yoy to IDR4,840 tn, surpassing banking industry growth (6.45% yoy).

•    On the asset quality side, we are on the view that all banks under our coverage should continue to be in a well shape condition after OJK fully lifted its relaxation.

•    To sum up, we think BBNI has its solid latent 4Q23 growth, as ytd loan repricing lagged behind its peers. Please bearing in mind that we also think that BRIS ‘23F likely to remain solid benefited from its high yield segments. Maintain our Overweight rating for banking sector, with BBRI and BBNI as our top pick.

Regards,
Akhmad Nurcahyadi - KBVS Research team