BBTN - 1H24 financial results

BBTN - 1H24 financial results Bank Tabungan Negara (BBTN) reported its 1H24 financial results. Net interest income slips 7.0%. PPOP sharply declined 24.4%. Provisions strongly improves 49.9% yoy. Net profit growth flat at 1.9% yoy. Total loan 14.43% yoy higher, while total TPF 16.64% higher. Of the customer deposit boards, TD led the highest growth of 23.16% yoy followed by CA 14.63% yoy. NIM shrank to 3.0% vs 3.6% in 1H23. NPL stood at 3.1%, significantly improving from 3.7% in 1H23. CoC also recorded better figure to 0.6% vs 1.3% in 1H23. (Source : Company) Comment : BBTN 1H24 net profit flat growth of 1.9% yoy was mainly helped by a sharp drop in provision (49.9% yoy). Net interest income declined by 7% yoy on the back of a higher cost of funds to 4.1% vs. 3.6% in 1H23. The increasing cost to income was also adding pressure to PPOP, which weakened by 24.4% yoy. In all, BBTN's 1H24 earnings came in below ours and consensus expectations. Total housing loans grew by 11% yoy, helped by both subsidized and non-subsidized mortgages. We also like the sharp increase in its non-housing loan (260 bps), which could play a more significant role in BBTN total loan growth going forward. Total TPF rose 80.2% yoy, primarily due to 23.2% yoy TD growth. On key performance metrics, we expect NIM pressure to get softer and risk metrics figure to continue stay low. Maintain BUY for BBTN with GGM TP based of IDR1,770/share (‘24F P/B of 0.6x), while currently traded (0.4x ‘24F P/B) slightly above its -2SD of 0.3x.