Andy wibowo gunAwAn
[email protected] +62 21 299 60 703 4th May 2015indonesiA
banking
Current Price IDR6,425
Price target IDR6,700 Upside potential (%) 4.28 stock data
Bloomberg Ticker BBNI IJ Equity Outstanding share (tn) 18.65 Market Cap (USD bn) 9.27 52 week range (Rp) 4,710-7,275 6M Avg Value(Rp bn) 144.1 YTD Returns (%) 6.1 Beta (x) 1.4 Major shareholders (%) Government 60.0 Public 40.0
share Price Performance
share Performance (%)
Month Absolute Relative
3m 4.9 2.9
6m 10.2 10.5
12m 36.2 26.8
Equity Research
//Result Update
in spite of bbni having put in place a new management team, no major strategy changes
are reportedly contemplated, going forward. if indeed the reformed bbni management
team intends to follow policies of its predecessor, we shall maintain our price target at
IDR6,700, allowing us to assign a HOLD recommendation for BBNI. BBNI currently trades
at 1.4x and 1.2x of PbV in 2015F and 2016F.
seasonally slow in early ??
Even though BBNI’s net profit has grown a yearly basis by 17.7% YoY, on a quarterly basis net
profit has dropped by 11.2% qoq, as a seasonal phenomenon, as anticipated by management.
However, BBNI’s net profit has only achieved by 21.3% of our 2015F net profit target of
IDR13.2 tn.
Higher contribution interest income from loans
The increase in net profit on a yearly basis (as mentioned above) has been tracked by higher
interest income. We see 1Q15 interest income from loans was higher compared to 1Q14, due
to higher average yields on loans. Going forward we believe that BBNI’s interest income from
loans will continue as one of their earning assets.
Loans and their quality
Going forward, BBNI will pay more attention and increase focus on three segments,
specifically Corporate, Middle & Small and Consumer. However, most investors are concerned
about its increase in Medium segment pre NPL ratio which stood at 6.5% in 1Q15. Based on
management guidance, they are not worried about this because one of its three debtors has
higher collateral than loan value. In addition, the value of pre NPL is approximately IDR3.0 tn.
Feasibility study for new program introduced by FsA
To secure low-cost funds, BBNI is currently engaged in a feasibility study and calculating its
risks about the LAKU PANDAI program, as this program is using agents to round up third party
funds. Note that BBRI, BMRI, BTPN and BBCA have all been approved by FSA to implement
this program which, if run properly, will make our banking industry more efficient as it is
branchless.
Maintained price target
Despite its bottom-line achievement being slightly below with our target, we still maintain
our 2015F net profit target, as we see BBNI’s net profit slowing in early quarter, while we are
optimistic it will be higher the next quarter. Moreover, our 2015F price target at IDR6,700.
Key investment Mectric
Bank nEgaRa indonEsia
No Major Changes
HoLd
3,500 4,500 5,500 6,500 7,500Jan-14 Apr-14 Jul-14 Oct-14 Jan-15 Apr-15
2013 2014 2015F 2016F 2017F
Interest Income (IDR bn) 26,451 33,365 35,003 40,716 50,013
Net Profit (IDR bn) 9,054 10,783 13,251 16,700 21,196
NIM 5.6% 6.0% 6.6% 7.2% 7.9%
ROE 19.0% 14.3% 16.0% 17.2% 18.4%
Dividend Yield 2.9% 1.4% 1.7% 2.1% 2.7%
PE (x) 8.1 10.6 9.0 7.2 5.7
Source: Company
Figure 1: Quarterly Net Profit
Source: Company
Figure 2: Interest Income Portfolio Trends
Source: Company
Figure 3: Loan yield and Cost of Fund
Source: Company
Figure 5: bbni’s nPL Movement
Source: Company
Figure 4: Pre NPL Ratio Trends
Source: Company
Figure 6: CAsA in 1Q15
2,0 69 .0 2,2 09 .0 2,2 58 .0 2,5 18 .0 2,3 93 .0 2,5 43 .0 2,6 75 .0 3,1 72 .0 2,8 17 .0 1,000.0 1,500.0 2,000.0 2,500.0 3,000.0 3,500.0 1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 IDR bn 82.5% 85.3% 85.7% 85.7% 87.0% 9.5% 8.4% 7.8% 6.8% 7.0% 6.8% 5.2% 4.9% 4.3% 4.3% 5.0% 15.0% 25.0% 35.0% 45.0% 55.0% 65.0% 75.0% 85.0% 95.0% 2012 2013 2014 1Q14 1Q15Loan Government Bonds
10.6% 10.2% 10.9% 10.2% 11.2% 2.7% 2.4% 3.2% 2.8% 3.2% 1.5% 1.7% 1.9% 2.1% 2.3% 2.5% 2.7% 2.9% 3.1% 3.3% 5.0% 6.0% 7.0% 8.0% 9.0% 10.0% 11.0% 12.0% 2012 2013 2014 1Q14 1Q15
Average Yield on Loan Cost of Fund
2.0% 2.7% 2.9% 6.5% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 2012 2013 2014 1Q14 1Q15
Corporate Small Consumer Medium
5.151
5.430
1.313 859
Beginning Downgrade Write Off Ending Balance
Current Account, 26.0%
Saving, 37.0% Time Deposit, 37.0%
Source: Bloomberg
Figure 7: Pe band
Source: Bloomberg
Figure 8: PbV band
Source: Bloomberg
Figure 9: Bloomberg Rating Consensus
Source: Bloomberg
Figure 10: Valuation Map
Source: Bloomberg
Figure 11: net Value by brokerage ytd
Source: Bloomberg
Figure 12: net Value by brokerage yoy
-1 ST.Dev Mean +1 ST.Dev -2 ST. Dev +2 ST. Dev 6.0 8.0 10.0 12.0 14.0 16.0 18.0Jan-11 Jan-12 Jan-13 Jan-14 Jan-15 Jan-16
-1 ST.Dev Mean +1 ST.Dev -2 ST. Dev +2 ST. Dev 1.0 1.5 2.0 2.5
Jan-11 Jan-12 Jan-13 Jan-14 Jan-15
57. 6% 57. 6% 62. 5% 60. 0% 68.8% 68.8% 36. 4% 36. 4% 31. 3% 36. 7% 25. 0% 25. 0% 6.0% 6.0% 6.2% 3.3% 6.2% 6.2% Rp5,500 Rp6,000 Rp6,500 Rp7,000 Rp7,500 0.0% 20.0% 40.0% 60.0% 80.0% 100.0%
Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 BUY HOLD SELL Price
CG, 23.2% ML, 11.9% BK, 11.0% FG, 10.4% RX, 9.5% DX, 5.9% IF, 4.8% Others, 23.3% CG, 18.2% CS, 12.4% ML, 10.7% FG, 10.0% RX, 9.0% BK, 8.7% DX, 5.5% Others, 25.5% BBCA BBNI BMRI BBRI BDMN BBTN BJBR BJTM 0.5 1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5% 10% 15% 20% 25% 30%
Table 1: 3M15 Result
Source: Company, Sucorinvest
Balance Sheet (IDR bn) 3M14 3M15 YoY 4Q14 1Q15 QoQ 2015F % AZ Est.
Placement With Other Banks & BI 11,701 17,247 47.4% 14,530 17,247 18.7% 29,061 59.3% Marketable Securities 13,579 11,531 -15.1% 12,743 11,531 -9.5% 12,284 93.9% Government Bonds 42,322 44,589 5.4% 43,830 44,589 1.7% 48,331 92.3% Loans 247,120 269,513 9.1% 277,622 269,513 -2.9% 322,943 83.5% Corporate 67,973 72,948 7.3% 72,874 72,948 0.1% 87,410 83.5% SoE 42,221 40,594 -3.9% 46,841 40,594 -13.3% 48,642 83.5% Medium 31,078 39,456 27.0% 40,324 39,456 -2.2% 47,278 83.5% Small 38,821 37,948 -2.2% 40,374 37,948 -6.0% 45,471 83.5% Consumer 47,453 52,527 10.7% 47,453 52,527 10.7% 62,940 83.5% Others 143,915 163,742 13.8% 29,756 163,742 450.3% 196,203 83.5% Total Assets 371,461 407,215 9.6% 416,574 407,215 -2.2% 461,534 88.2% Customer Deposits 273,966 305,150 11.4% 313,893 305,150 -2.8% 322,943 94.5% Deposits From Other Banks 3,750 3,494 -6.8% 3,177 3,494 10.0% 4,067 85.9% Marketable Securities Issued 5,638 6,504 15.4% 6,158 6,504 5.6% 10,257 63.4% Borrowings 15,409 8,922 -42.1% 11,212 8,922 -20.4% 22,272 40.1% Equity 51,121 61,862 21.0% 61,021 61,862 1.4% 82,758 74.8%
Income Statements (IDR bn) 3M14 3M15 YoY 4Q14 1Q15 QoQ 2015F % AZ Est.
Net Interest Income 5,289 6,096 15.3% 5,982 6,096 1.9% 27,323 22.3% Operating Income 7,663 9,035 17.9% 9,407 9,035 -4.0% 35,941 25.1% Operating Expenses (3,447) (4,229) 22.7% (4,906) (4,229) -13.8% (16,428) 25.7% Pre-Provision Income 4,216 4,806 14.0% 4,501 4,806 6.8% 39,036 12.3% Provisioning (1,233) (1,241) 0.6% (334) (1,241) 271.6% (3,096) 40.1% Net Profit 2,393 2,817 17.7% 3,172 2,817 -11.2% 13,251 21.3%
Ratios 3M14 3M15 YoY 4Q14 1Q15 QoQ 2015F % AZ Est.
NIM 6.1% 6.5% 0.4% 6.2% 6.5% 0.3% 6.6% -0.1% ROA 3.3% 3.6% 0.3% 3.5% 3.6% 0.1% 2.9% 0.7% ROE 22.6% 23.1% 0.5% 23.6% 23.1% -0.5% 16.0% 7.1% Cost to Income 39.8% 39.8% 0.0% 43.9% 39.8% -4.1% 53.4% -13.6% BOPO 69.2% 70.6% 1.4% 69.8% 70.6% 0.8% 62.7% 7.9% NPL 2.3% 2.1% -0.2% 2.0% 2.1% 0.1% 2.0% 0.1% LDR 88.4% 87.8% -0.6% 87.8% 87.8% 0.0% 96.6% -8.8% CAR 15.6% 17.8% 2.2% 16.2% 17.8% 1.6% 23.1% -5.3%
Financial Summary
Income Statements (IDR bn) 2013 2014 2015F 2016F 2017F
Interest Income 26,451 33,365 35,003 40,716 50,013 Interest Expenses (7,392) (10,989) (7,680) (7,166) (8,145) Net Interest Income 19,058 22,376 27,323 33,550 41,869 Other Operating Income 9,441 10,715 8,618 8,827 9,065 Fees 4,000 5,027 3,445 3,657 3,857 Others 5,441 5,688 5,173 5,171 5,208 Other Operating Expenses (14,573) (16,103) (16,428) (19,024) (22,359)
G&A (4,540) (5,091) (4,844) (5,462) (7,058) Salary (6,084) (6,781) (8,074) (10,195) (11,625) Others (3,949) (4,232) (3,510) (3,367) (3,676) Operating Profit 11,219 13,346 16,417 20,723 26,338 Profit Before Tax 11,278 13,524 16,613 20,938 26,575 Net Profit 9,054 10,783 13,251 16,700 21,196
Balance Sheet (IDR bn) 2013 2014 2015F 2016F 2017F
Cash 10,090 11,436 11,032 12,900 13,050 Current Account with BI 23,130 24,598 16,147 18,206 8,304 Current Account with Other Banks 4,102 4,496 3,875 4,369 4,982 Placement with BI & Others 23,473 14,527 29,061 18,203 16,605 Marketable Securities 11,966 12,738 12,284 13,850 15,793 Gross Loans 250,638 277,622 322,943 378,683 448,398 Allowances (6,880) (6,970) (11,113) (13,031) (15,430) Nett 243,758 270,652 311,830 365,652 432,969 Government Bonds 41,432 43,830 48,331 54,493 62,136 Fixed Asset 5,514 6,222 5,755 6,489 7,399 Other Assets 23,191 28,075 23,218 23,206 25,992 Total Assets 386,655 416,574 461,534 517,369 587,229 Customer Deposits 291,890 300,265 322,943 364,118 415,183 Current Account 88,079 82,743 93,653 105,594 120,403 Saving Account 111,735 114,970 129,177 145,647 166,073 Time Deposit 92,076 102,552 100,112 112,877 128,707 Marketable Sec. Issued 6,037 6,158 10,257 9,586 8,685 Borrowings 18,951 11,212 22,272 20,737 19,308 Other Liabilities 22,094 23,514 23,304 25,874 28,886 Total Liabilities 338,971 341,149 378,776 420,315 472,062 Total Equity 47,684 75,425 82,758 97,054 115,167 Financial Ratios 2013 2014 2015F 2016F 2017F Loan Growth 24.9% 10.8% 16.3% 17.3% 18.4% Deposit Growth 13.3% 2.9% 7.6% 12.8% 14.0% NII Growth 23.3% 17.4% 22.1% 22.8% 24.8% Net Profit Growth 28.5% 19.1% 22.9% 26.0% 26.9%
LDR 83.5% 90.1% 96.6% 100.4% 104.3%
Gross NPL 2.2% 1.7% 2.0% 2.0% 2.0%
CASA 68.5% 65.8% 69.0% 69.0% 69.0%
CAR 15.1% 16.2% 23.1% 24.1% 25.2%
Expenses Ratio 72.1% 70.6% 62.7% 59.0% 56.6% Cost to Income Ratio 63.2% 58.8% 53.4% 51.1% 48.9%
Sucorinvest, rating definition, analysts certification, and important disclosure
Ratings for Sectors
Overweight : We expect the industry to perform better than the primary market index (JCI) over the next 12 months.
Neutral : We expect the industry to perform in line with the primary market index (JCI) over the next 12 months.
Underweight
: We expect the industry to underperform the primary market index (JCI) over the next 12 months.
Ratings for Stocks
Buy
: We expect this stock to give return (excluding dividend) of above 10% over the next 12 months.
Hold
: We expect this stock to give return of between -10% and 10% over the next 12 months.
Sell
: We expect this stock to give return of -10% or lower over the next 12 months.
Analyst Certification
The research analyst(s) primarily responsible for the preparation of this research report hereby certify that all
of the views expressed in this research report accurately reflect their personal views about any and all of the
subject securities or issuers. The research analyst(s) also certify that no part of their compensation was, is, or will
be, directly or indirectly, related to the specific recommendations or views expressed in this research report.
disclaimers
This document has been prepared for general circulation based on information obtained from sources
be-lieved to be reliable but we do not make any representations as to its accuracy or completeness. PT
Sucor-invest Central Gani accepts no liability whatsoever for any direct or consequential loss arising from any use
of this document or any solicitations of an offer to buy or sell any securities. PT Sucorinvest Central Gani
and its directors, officials and/or employees may have positions in, and may effect transactions in
securi-ties mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees
or act as principal or agent in dealings with respect to these companies. PT Sucorinvest Central Gani may
also seek investment banking business with companies covered in its research reports. As a result
inves-tors should be aware that the firm may have a conflict of interest that could affect the objectivity of this
report. Investors should consider this report as only a single factor in making their investment decision.
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