BBNI - Liquidity is still considered strong

BBNI - Liquidity is still considered strong The trend of still-high interest rates has an impact on reducing liquidity in financial markets, including the banking sector. In the midst of these conditions, Bank Negara Indonesia (BBNI)'s liquidity remains healthy and is able to encourage credit to meet targets. BBNI's monthly financial report (bank only) in May 2024 shows the credit position at IDR 709 tn, growing 12.6% yoy compared to the same period the previous year. In terms of funding, total Third Party Funds (DPK) for banks with the 46 logo reached IDR788 tn, up 7.2% yoy. Thus, BBNI's Loan to Deposit Ratio (LDR) position as of the end of May 2024 is at 90%. (Source : Kontan) Comment : In all, we believe BBNI’s 5M24 bank-only performance should be translated as a solid base to book another positive growth in the following months. We also expect BBNI to record healthy 1H24 earnings. In our view, its plan to reduce loan yields on selected portfolios, strengthen the TPF deposit mix, and maintain solid AQ improvement will become a crucial key to overall ‘24F PATMI growth. Maintain our buy call with a GGM TP of IDR6,530 (1.4x ‘24F P/B).