BBCA
Contact our analyst Achmadi
30% upside, Buy
8th August, 2023
Price Rp9,200
Target price Rp12,000
Net Profit Up +34%
In 1H-2023, BBCA achieved a robust Net profit growth of +34.02% YoY, reaching IDR 24.19 trillion. This impressive performance was driven by a 24.66% YoY increase in net interest income, resulting in a NIM ratio improvement of 60 bps (bank-only), reaching 5.60%. Additionally, asset impairment expenses decreased significantly by -49.51%. Looking ahead, we forecast BBCA's Net profit to continue improving in 2023, with an expected YoY growth of 22.71% to reach IDR 49.985 trillion, while the NIM ratio is projected to increase to 6.20%.
Solid Loan Expansion
As of June 30th, 2023, BBCA reported a solid consolidated loan growth of 8.97% YoY. The consumer segment led the way with a growth of 14.55% YoY, followed by Commercial SME and Corporate loans, which grew by 10.95% YoY and 5.09% respectively. The Trading and Manufacturing sectors accounted for the highest proportion in the loan portfolio, representing 22.4% and 21.5% respectively. We anticipate BBCA to continue expanding its loan portfolio by another 9.06% YoY, with the consumer segment expected to have the highest growth of 12.23% YoY.
Improved Asset Quality
In Q2-23, BBCA demonstrated improved asset quality, as evidenced by a decreased gross NPL ratio by 30bps to 1.9%. Among the three segments, the Consumer segment stood out with not only the highest loan growth but also the best quality, with an NPL ratio of 1.45%, which decreased by 24 bps YoY. The NPL ratios for Corporate and Commercial & SME segments were 1.82% and 2.32% respectively. The Transportation, Electricity, Gas & Water, and Mining sectors performed well with NPLs at only 0.1% each. We expect BBCA to continue managing its asset quality and further decrease its NPL ratio to 1.60%.
Stellar Digital growth
In Q2-2023, BBCA demonstrated impressive digital transaction growth, with a 41% increase in the number of customers over two years, leading to a 3.6x growth in mobile banking transactions over three years. Mobile and internet transactions accounted for 91.5% of the total, growing by 30%, and representing 61.4% of the value composition.
Valuation: 30% Upside, Buy
Based on our DDM valuation, we set a target price of IDR 12,000 within one year, implying a trading price of 6.05x PBV and indicating a potential upside of 30%. Therefore, we maintain a Buy rating for BBCA.
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