BBCA - Buoyant 1Q24 earnings growth

KBVS Update
Tuesday, 23 April 24

BBCA: Buoyant 1Q24 earnings growth
(Maintain BUY; TP: IDR11,070)

* BBCA’s 1Q24 earnings at IDR12.9 tn grew strongly by 11.7% yoy, driven by solid improvement from top to bottom. On quarterly basis, despite usually noted a weaker growth compared to other quarters in the year, 1Q24 PATMI robust earnings growth recorded the highest (+5.4% qoq) even compared to several years before Covid period. In all, 1Q24 earnings came in line with ours and street forecast at run rate of 23.9%/24.1% vs 5yr historical average 1Q of 22.3%.

* BBCA’s loans growth has been on a growth trajectory and we expect to witness it will continue going forward. 1Q24 loans grew sturdily by 17.1% yoy. The robust loan growth was mainly driven by strong working capital loans (19.2% yoy) and a stronger demand in investment loans (28.3% yoy).

* Amid the continuing cautiously optimistic view on the ongoing third-party funds growth this year, BBCA reported a well-accepted total TPF growth of 7.9% yoy. We also like declining TD growth -0.4% qoq which resulting to around 40bps higher CASA portion to 81.5%. We believe the bank should continue to book a stable CASA which become as one of the key for its ‘24F margin achievement.  

* On ratio performance, all the key metrics show a steady improvement, with sound stable profitability and well managed asset quality. NIM at 5.6% was within ‘24F management guidance (5.5%-5.6%). CoC continued to arrive at a low level (40bps). LAR strongly improved to 6.6% compared to 9.8% in 1Q23, with total loan at risk sharply drop by 22.2% yoy to IDR 51.4tn vs last year of IDR 66tn (1Q23).

* Maintain BUY. Our DDM TP for BBCA of IDR11,070 is pegged at 4.9x ‘24F P/B while currently trading at 4.2x ‘24F P/B, or slightly above its historical mean average of 4.1x ‘24F P/B.

Regards,
Akhmad Nurcahyadi - KBVS Research