BBRI - Expecting 9M24 results to continue inline

KBVS Update
Tuesday, 3 October 2024

BBRI - Expecting 9M24 results to continue inline
(Maintain BUY; TP: IDR6,830)

* BBRI 8M24 net profit IDR36.2 trillion, a 3.9% increase YoY, representing 55% of our full-year forecast. On a standalone basis, BBRI's net income surged by 20.9% YoY and 51% MoM in Aug24, reaching IDR4.8 trillion.

* We believe BBRI's 9M24 earnings will likely remain stable. Our conservative forecast for BBRI's 9M24 bank only PATMI is IDR40.46tn (3.75% YoY growth). The market expects 3Q24 consolidated net profit to reach IDR13.67tn, bringing 9M24 net income to approximately IDR41.9tn (7.49% YoY growth).

* BBRI recorded significant loan growth of 7.1% YoY to IDR1,203.68tn. While YTD loan growth has been declining, we believe this is acceptable as the bank prioritizes selective lending to maintain asset quality amid credit cost concerns.

* Key ratio performance generally improved. NIM increased slightly to approximately 6.5% in Aug24, up from 6.4% in June24. Due to improved asset quality, the credit cost was 3.2%, an 82-bps improvement compared to 2.4% in the same period last year, and closer to management's guidance of a maximum of 3% for 24F.

* We acknowledge market concerns about BBRI's earnings growth performance this year, which have contributed to a decline in foreign ownership from 36.7% in Jan24 to 34.0% in Sep24. We anticipate that the upcoming release of 9M24 earnings results, coupled with continued strong earnings performance in the remaining quarters of the year, will support an improvement in the stock price. *Maintain BUY GGM-TP of IDR6,830 (pegged at 3.0x ’24F P/B) while currently trading at 2.2x ‘24F P/B, or at its average historical mean.

Regards,
Akhmad Nurcahyadi - KBVS Research team