BMRI - BI holds interest rates; the bank optimistic credit will grow up to 15%

BMRI - BI holds interest rates; the bank optimistic credit will grow up to 15% Bank Indonesia (BI) has again maintained its benchmark interest rate, or BI rate, at the level of 6.25%. Bank Mandiri (BMRI) also provided a response regarding BI's decision. Bank Mandiri Corporate Secretary, Teuku Ali Usman, said that BI policies also made a positive contribution to credit growth, which is still showing an acceleration trend until the end of Semester I 2024. This was also followed by healthy credit demand in line with the economy, which was still resilient. "On the other hand, we see that there is still an opportunity for the Rupiah to strengthen. However, we still need to be wary of the volatility of the rupiah exchange rate by looking at political dynamics in the United States (US) and global economic fluctuations," he explained in a written statement on Thursday (18/7). Meanwhile, until the end of May 2024, Bank Mandiri's credit distribution on a bank-only basis was still recording positive growth, with an increase of 19.5% yoy to IDR1,152.53 tn. This credit realization was also followed by Third Party Funds (DPK), which grew 12.9% yoy to IDR1,296.1 tn, supported by cheap funds or current account savings accounts (CASA). In line with domestic macroeconomic fundamental conditions that are still good, followed by positive credit demand, we are optimistic that Bank Mandiri's credit will still be able to grow. (Source : Kontan) Comment : We believe BMRI could reach its ‘24F loan growth guidance range of 13%–15% yoy, or in line with our expectation for BMRI loan growth guidance this year at around 13.5% yoy. Of the total of our ‘24F forecast, the corporate segment will remain the backbone, followed by commercial and consumer. We also believe the bank will continue to record stable risk metrics. Maintain BUY with a GGM-based TP of IDR8,100 (2.6x ’24F P/B).