BBRI - In-line 1H24 earnings; prudent hope in CoC

KBVS Update
Tuesday, 30 July 2024

BBRI - In-line 1H24 earnings; prudent hope in CoC
(Maintain BUY; TP: IDR6,830)

* BBRI 1H24 top line grew strong (15.3% yoy), supported by robust loans and higher yield yoy. Yet, cost of funds was widely expected to be higher and thus made net interest income arrive at a single-digit level of 6.7% yoy. In all, 1H24 net profit came in within ours and street expectation at a run rate of 44.5%/44.0%.

* Robust loans remained within management guidance. Corporate loans, stood at the second highest growth of 29.2% yoy. Total TPF still noted a double-digit rate.

* On key ratio NIM squeezed to 7.64% vs. 7.84% in 1Q24. LDR expansion, solid earrings asset yield and stronger CASA portion should provide some cushioning.

* On the flip of a coin CIR saw an improvement. Likewise, for NPL and CoC. Despite consistently moving closer to ‘24F guidance, we are cautiously optimistic on BBRI’s CoC target of Max. 3. The bank kept its ‘24F guidance.

* Maintain BUY. Our GGM-based TP for BBRI of IDR6,830 (3.0x ’24F P/B) while currently traded at its historical average mean.

Regards,
Akhmad Nurcahyadi - KBVS Research team