BBNI - Another Solid Monthly Results

KBVS Update
Tuesday, 19 Sept 2023

BBNI: Another Solid Monthly Results 
(Maintain BUY; TP: IDR11,160)

•    BBNI reported double-digit bank only earnings in 7M23 (+13.8% yoy), mainly driven by dropping provisions by -26.4% yoy to IDR5.31 tn and boosted by higher interest income (+17.9% yoy) and manageable opex at +1.9% yoy. On Jul ’23, the bank saw stronger performance with earnings surged 20.5% yoy on the back of solid performance across the board.

•    Bank only total loan grew 7% yoy to IDR646.71 tn and arrives within management’s ’23 lower range guidance of 7%-9%. This year, BBNI’s loan growth is expected to reach 9.1% yoy, which driven mainly by corporate and consumer segments. On the liability side, TPF grew 5.5% yoy to IDR719.96 tn, thanks to continuing solid CA growth (+16.9% yoy).

•    Aside from its 20.5% yoy bank only earnings growth in Jul ‘23, we also like BBNI’s key performance metrics which continue to arrives within ‘23F guidance, such as NIM and CoC that stood at 4.6% (‘23F NIM guidance: ≥ 4.6%) and 1.4% (‘23F NIM guidance: ≥ 1.4%), respectively.

•    Post 1H23 inline results, we might see BBNI’s 9M23 earnings to beats our expectation even under the assumption of flattish earnings performance in Aug – Sep ‘23. Under this scenario, BBNI’s 9M23 PATMI may arrive at IDR15.8 tn (+16.0% yoy), or 78.3% of our ‘23F which 339bps above its 5yr historical average of 74.9%.

•    Maintain BUY with target price of IDR11,160. At this juncture we deemed BBNI to remain attractive due to: (1) lagging stock performance (2) undemanding valuation and (3) higher foreign holding. Our target price is based on Gordon Growth Model-derived fair P/B of 1.4x. BBNI is currently trading at 1.1x ‘23F P/B, or at its 10-yr historical mean of 1.1x.

Regards,
Akhmad Nurcahyadi - KBVS Research