BMRI - Strong earnings pick-up, raising our ‘24F EPS

KBVS Update
Monday, 1 Nov 2023

BMRI: Strong earnings pick-up, raising our ‘24F EPS
(Maintain BUY; TP: IDR6,650)

•    BMRI 9M23 earnings at IDR 39.06 tn (27.4% yoy) mainly driven by solid growth across the P&L boards, with net interest income and PPOP grew by 12.3% yoy and 15.4% yoy, beating both ours and street expectation at 82%/81% compared to 76% of 5yr historical average.

•    Loan grew by 12.7% yoy and around 70bps higher than upper ‘23F BMRI’s management guidance at 12%, as all segment reported sturdy growth. The bank managed to record suitable TPF growth (6.6% yoy) amid tightening liquidity (CASA +12.8% yoy, TD -7.46% yoy).  

•    Key performance metrics continue moves within its improvement track, with NIM reported 17bps higher to 5.59% from 5.42% in 9M22 and arrives within BMRI ‘23F forecast at 5.3%-5.6%.. NPL +50bps to 1.49% with stronger coverage (+31bps) to 299%.

•    We revisit our model and made some adjustment to accommodate better than expected 9M23 results as well BMRI solid prospect growth. Our new ‘23F/‘24F loan growth forecast is around 70bps/90bps higher to 11%/12% from 10%/11% previously. We also cut our CoC assumption as we believe asset quality will continue to improve.

•    Maintain BUY with higher TP of IDR6,650. We raised our TP for BMRI as we revised up our EPS forecasts and rolled over BMRI’s valuation to ‘24F. Our GGM intrinsic value for BMRI is pegged at 2.4x ‘24F P/B while its currently trading at 2.0x ‘24F P/B, or below its +2SD historical mean.  

Regards,
Akhmad Nurcahyadi - KBVS Research