BBNI - MoM Turnaround in May '24; Expecting In-line 1H24

KBVS Update
Monday, 24 June 2024

BBNI: MoM Turnaround in May '24; Expecting In-line 1H24
(Maintain BUY; TP: IDR6,530)

* BBNI 5M24 earnings remain soft at 1.5% yoy, yet recorded a robust turnaround on a monthly basis (8.3% mom). Assuming a 1H24F run rate of 45% and lower vs. the 5-year historical average of 49%, we might witness 6M24F earnings on a consolidated basis grow by 4.5% yoy, or more than double yoy vs. 3M24 growth of 2.0% yoy.

* The NIM contraction remains. However, proven year-to-date softer interest expense growth to 36.8% yoy in May24 from its highest in Feb24 (41.8% yoy) coupled with selective loan repricing should be translated as a promising room for a better NIM. The bank has repriced its loan yield by around IDR25-30tn).

* BBNI robust loan growth continues to arrive above ‘24F management upper range guidance of 11% yoy *and around 218 basis points higher than our ‘24F loan growth for BBNI. Total TPF grew by 7.2% yoy in May 24, backed by solid demand deposit growth at 13.8% yoy, resulting in another high single-digit CASA growth of 9.0% yoy.

* We like BBNI CoC achievement in 5M24 of 1.0%, which improves by around 39 bps yoy and is far below ‘24F management guidance of <1.4%. We also like the bank cost-to-income ratio, which continues to record better efficiency at 44.5% compared to 46.3% at the beginning of 2024.

* Maintain BUY, GGM TP of IDR6,530. Our GGM-based TP of IDR6,530 is pegged at 1.4x ‘24F P/B while currently trading at 1.0x ‘24F P/B, or slightly above its -1SD historical mean of 0.9x.

Regards,
Akhmad Nurcahyadi - KBVS Research