BBNI - FY24 earnings; slightly below

KBVS Update
Tuesday, 31 January 2025

BBNI: FY24 earnings; slightly below
(Maintain BUY; TP: IDR6,300)

* BBNI's 12M24 earnings fell slightly short of expectations (97.24%/97.17%). The FY24 single-digit earnings growth (2.7% yoy) was primarily hampered by persistent pressure on blended funding costs and substantial provisions allocated in 4Q24.

* Gross loan growth of 11.6% yoy, aligning with management's 10-12% target and exceeding both industry and our '24F projections for BBNI (10.4%). Persistent liquidity pressures resulted in a plateau in total TPF. Notably, the savings segment demonstrated strong growth of 11.0% yoy, significantly outpacing time deposit growth of just 3.8% yoy.

* Despite ongoing NIM compression (-34 bps yoy) to 4.2%, the FY24 NIM surpassed management's guidance of ≥4.0% by approximately 20 bps. Risk management remained effective, with gross NPLs declining 10bps yoy to 2.0% in FY24.  The CoC also improved (-0.3% yoy) to 1.1%, aligning with BBNI's FY24 guidance of ±1.0%.

* We are encouraged by BBNI's impressive progress in expanding its digital user base (as anticipated in our previous report), which should significantly bolster transactional banking activities in the coming quarters. Registered users have surged by 430% within just six months, growing from approximately 1 million in Jul24 to 5.3 million by Dec24.

* We anticipate a prolonged period of “higher for longer”, with potentially persistent high SRBI yields exacerbating already tight liquidity conditions, creating significant headwinds. Given the uncertainties and profitability challenges, particularly in the first half of 2025, BBNI's ability to maintain its first-quarter 2024 NIM in the first-quarter of 2025 would be a commendable achievement. The bank projects loan growth of 8-10% yoy (KBVS: 7.98%), a NIM range of 4.0-4.2% (KBVS: 4.03%), and CoC of ±1.0% (KBVS: 1.02%).

* Maintain BUY, GGM TP of IDR6,300, derived from our GG Model (1.3x '25F P/B). The stock is currently trading at 1.0x '25F P/B, slightly above -1SD of 0.9x.

Regards,
Akhmad Nurcahyadi - KBVS Research