BBCA - Another robust bank only (11M24) earnings; ‘25F to continue

KBVS Update
Thursday, 19 Dec 2024

BBCA: Another robust bank only (11M24) earnings; ‘25F to continue
(Maintain BUY; TP: IDR12,510)

* BBCA demonstrated robust earnings momentum in Nov24 (14.3% yoy), achieving an 11M bank-only PATMI of IDR 4.24tn, surpassing our forecast by 2.6% (11M24 run-rate: 90.8%/93.1%).

* Robust loan growth continued and reported 127bps higher to 15.5% yoy vs 14.2% yoy in the previous month (Nov24 MoM: 2.1%) and consistently arriving aboce BBCA’s ‘24F guidance of 9-10% yoy and our forecast of 9.6% yoy. Worth noting that the growth was beating total sector loan growth by around 467bps higher (10.8% yoy vs 15.5% yoy).

* Bank Central Asia (BBCA) has successfully navigated the recent peak in industry borrowing costs and we believe will continue in ‘25F. In all, we anticipate that BBCA will continue to deliver robust earnings and maintaining its leadership position in the banking landscape. Furthermore, BBCA's prudent strategy is evident in the slower growth of its marketable securities portfolio relative to its loan to asset ratio, demonstrating its strong focus on its core intermediation function.

* Amid the continuing market pressure on indo banking stocks, BBCA remain as the least sold stock. The 1M24 return of -1.5% has offered a wider upside potential, in our view. Additionally, the stock ranked on the 5th most sold stock (-0.3% mom) following BRIS (-0.1% mom), indicating that BBCA remain as the preferred stock in the sector. Maintain BUY GGM-TP IDR12,510 (4.8x ‘25F P/B), while currently trade at 3.8x ‘25F P/B or slightly above average mean of 3.7x ‘25F P/B.

Regards,
Akhmad Nurcahyadi - KBVS Research