BMRI - Expect Jul24 and overall 3Q24 growth to sustain

KBVS Update
Monday, 14 Aug 2024

BMRI - Expect Jul24 and overall 3Q24 growth to sustain
(Maintain BUY; TP: IDR8,100)

* BMRI has pocketing enough 1H24 earnings and key performance metrics to enter 2H24. Both Jul24 and Aug24 bank only results will become a strong signal for its 3Q24, which we expect should remain within ours and consensus expectations.

* Even assuming our Jul24 bank only net profit growth expectation for BMRI of -3.8% mom (weaker than Jul23 of -2.6% mom), the cumulative 7M24 bank only PATMI will still grow at 7.4% yoy, or 27bps better vs 6M24 period. On the consolidated level, we believe the bank will witness another solid quarterly result.

* Following its revised down ‘24F guidance (1Q24) for several key performance metrics on the back of the latent impact of the 25-bps BI rate increase, now the bank has new loan growth guidance on better confidence underpinned by strong 1H24 results, in our view.

* Carefully selected debtors for wholesale yield re-pricing will become the main story amid our expectation of a stable low cost of funds (increasing funding cost appears to have a peak in 1Q24) in the remaining quarters of this year.  Albeit mild, we think better key profitability metrics figures in 1H24 should be translated as a potential continuing NIM expansion.

* Loans at risk and Covid-19 restructured loans have never been our concerns since our ‘24F outlook for BMRI was released in November 23. Indeed, LAR has been massively improving by 258 basis points yoy to 7.76% vs. 10.3% in 1H23 and around 86 basis points better from 8.62% at the end of last year.

Regards,
Akhmad Nurcahyadi - KBVS Research team