BRIS - Expect 1H24 earnings growth to be intact

KBVS Update
Thursday, 20 June 2024

BRIS: Expect 1H24 earnings growth to be intact           
(Maintain BUY; TP: IDR2,970)

* BRIS 5M24 bank only earnings (18.6% yoy) growth should be translated as a strong support for 1H24 result. Robust loan growth remains with better total TPF which backed by higher growth from the CASA portion. We expect first-half earnings growth to remain on track and arrives within ours and the street's ‘24F forecasts (even assuming flat Jun ‘24 PATMI).

* We closely watch BRIS NIM, which reported a lower figure (70 bps yoy) as transmission adjustments to borrowing costs remain intact. On the EA interest income side, we have not seen a significant repricing yield until 5M24. We expect this will start to take effect in June and potentially impact a better 9M24 NIM compared to the latest position in 5M24 of 5.3%.

* As the uncertainty remains, selling pressure on indo-banking stocks continues. With the stock price having dropped by from its YTD high, we believe at yesterday's closing price the stock is offering attractive upside potential. Despite the continuing mild appetite and the sell-off on indo-banking stocks, BRIS’ stock foreign ownership has, interestingly, been increasing YTD.

* Maintain BUY and GGM TPs of IDR 2,970. Our GGM TP of IDR2,970/share pegged at 3.2x ‘24F PB, while currently, the stock is trading at 2.6x ‘24F P/B, or at its average historical mean.

Regards,
Akhmad Nurcahyadi - KBVS Research