BBRI - Will continue to focus on lending to SME segment in ‘24

BBRI - Will continue to focus on lending to SME segment in ‘24 Bank Rakyat Indonesia (BBRI) will continue to focus on lending to the SME segment in 2024 amid the trend of increasing interest rates and the political year. According to BBRI, the bank is optimistic to face the year 2024. BBRI also view that the election is likely to have a positive impact on the turnover or revenue of the SME players, which is BBRI's core business. In regards to the benchmark interest rate, BBRI view that this will not have a significant impact on liquidity in general. (Source: Kontan). Comment: As the largest SME’s creditors, we think BBRI will continue to become as the main beneficiaries of SME market growth in 2024 which in turn could bring BBRI’s NIM to arrive better year-on-year. Any latent higher benchmark rate in 2024 seems will not create any sudden impact to BBRI’s earnings and the transmission likely to remain smooth just like in 2023, in our view. Maintain BUY for BBRI, DDM TP of IDR6,390 (2.9x ’24F P/B).