BBTN - Boosting CASA, BTN optimistic TPF will grow above industry

BBTN - Boosting CASA, BTN optimistic TPF will grow above industry Bank Tabungan Negara (BTN) recorded a quite impressive growth in third-party funds (DPK) until August 2024. The realization reached IDR373.8 tn, growing 16.4% yoy. Low-cost funds or CASA contributed almost 50%. With that achievement, BTN is optimistic that DPK until the end of the year will continue to increase beyond the growth of DPK in the banking industry. This is supported by the company's efforts to encourage low-cost funds through attractive products and services. BTN President Director Nixon LP Napitupulu said that the collection of third-party funds (DPK) reflects the level of public trust in banking, especially in the digital era which requires every bank to quickly adapt to changes in the times.Therefore, BTN has begun the transformation of the BTN Mobile application by strengthening the system and adding features, which are expected to meet the needs of customers in conducting digital banking transactions. BTN Mobile is recorded to have around 3 million users."Our focus on digital transformation aims to increase low-cost funding. By becoming a transactional bank, BTN will be able to create a reliable source of low-cost funds in the long term. This way, we can grow our margins and provide added value to stakeholders and customers," said Nixon. (Source : Kontan) Comment : We anticipate that BBTN's blended funding costs will decline, and CASA growth will improve, leading to a potential expansion in net interest margin (NIM) as early as the second quarter of 2025. Additionally, the bank's focus on enhancing its digital banking features and the planned spin-off of its unit business are expected to positively impact its overall earnings performance in 2025. Based on these positive factors, we maintain our "BUY" call for BBTN, with a target price of IDR1,770, which is based on a 2024 price-to-book (P/B) ratio of 0.6x.