BBRI - 2023 earnings greater than ours and consensus

KBVS Update
Wednesday, 31 January 2024

BBRI - ’23 earnings greater than ours and consensus
(Maintain BUY; TP: IDR6,390)

•    BBRI '23 earnings grew strong by 17.5% yoy, driven by solid growth from top to bottom. We also like BBRI’s solid PPOP growth at 16.7% yoy, especially PATMI which grew by 17.5% yoy to IDR60.1 tn, despite provision expenses rose by 10.0% yoy. In all, '23 earnings arrive above ours and street forecast with a run rate of 103.1%/102.5%.

•    Loan grew by 11.2% yoy, (within BBRI ‘23F guidance, surpassing industry and in line with our ‘23F loan for BBRI). This year, management expect loan to grow within the range of 11%-12% yoy or in line with our ‘24F loan for BBRI at 11.6% yoy (see our previous report and outlook ‘24F). Key metrics continue to record another solid number, with NIM reported at 7.95%, surpassing ‘23F BBRI’s forecast at 7.7%-7.9%, while NPL improving by 12bps to 2.95% from 3.07% in 3Q23 (in line).

•    BBRI’s FY23 result should be translated as a solid base to sail the 2024 performance. ‘24F loan target is achievable. NIM guidance in ‘24F also likely reachable as think high yield segment and potential softened CoF as well as manageable loan yield will overall underpin the targeted rage figure (7.9%-8.0%), ceteris paribus.

•    In all, we expect a smoother ’24 election event with peaceful presidential and cabinet transition process. On this backdrop, we cautiously optimistic on the 1H24 result, especially as we expect a latent benchmark cut rate seems will arrive as soon as in the second semester of 2024. Maintain BUY with GGM TP of IDR6,390 pegged at 2.9x ‘24F P/B while its currently trading at 2.6x ‘24F P/B, or slightly above its +1SD historical mean.

Regards,
Akhmad Nurcahyadi - KBVS Research team