BBCA - 9M24 earnings above solid 25F growth to continue
KBVS Update
Monday, 28 Oct 24
BBCA: 9M24 earnings above; solid 25F growth to continue
(Maintain BUY; higher GGM TP: IDR12,510)
* BBCA's robust earnings growth surpassed expectations (ours/cons ‘24F run-rate: 76%.0/76.8% vs 73.4%). BBCA’s 3Q24 net income of IDR14.2tn came in line with our 3Q24F for BBCA of IDR14.3tn (BBCA vs consensus: above), while our 9M24F for BBCA at IDR41.2tn and consensus figure were also inline vs IDR41.1tn.
* BBCA demonstrated strong loan growth across all segments, with total loan (14.5% yoy) continues to arrive above industry figures (10.4% yoy) and our ‘FY24F loan growth for BBCA, thanks to the strong growth in corporate (15.9% yoy), SME (14.2% yoy), and consumer segment (13.1% yoy).
* NIM expansion remain intact, reaching 5.8% from 5.5% in 9M23 and consistently increasing to 5.9% in 3Q24 vs 5.6% in 1Q24 (beating our ‘24F NIM for BBCA around 30bps). Key risk metrics continue to exhibit a positive trend with CoC and NPL figure remain at low level.
* Following its robust 9M24 earnings, we might witness BBCA to deliver even higher 4Q24 earnings than our and consensus forecasts. To achieve our ‘24F earnings for BBCA of IDR54.06 trillion (consensus: IDR54.26 trillion), the bank would only need to record 4Q24 PATMI of IDR12.97 trillion (-8.7% qoq).
* The stock deserves continuing premium valuation in ‘25F. Despite the upcoming low interest environment, we think it would not be impacting much to BBCA’s solid deposit mixed funding cost. We are refining our 2025 forecasts to reflect BBCA's performance and future growth prospects. We make an adjustment on: (1) BBCA ‘25F loan growth (2) funding cost and loan yield as well as (3) risk free assumption to accommodate robust 9M24 result which resulting to potential stronger ‘25F earnings growth and a higher GGM TP.
* Maintain BUY. Post rolled-over to ‘25F period, our new higher GGM TP of IDR12,510 (pegged at 4.8x ‘25F P/B) is look more eye-catching as the stock is now trades at 4.2x ‘25F P/B or at its +1SD
Regards,
Akhmad Nurcahyadi - KBVS Research