BBCA
Contact our analyst Lingga
12% upside. Hold.
29th July, 2020
Price Rp30,925
Target price Rp34,690
Lower Loans
In the 2Q, loans decreased -2.8% QoQ or by 595,136 billion driven by consumer loans as credit card debt fell by -14.1% QoQ, and Vehicle loans decreased by -9.9% QoQ. Commercial & SME loans decreased by -3.4% QoQ, while Corporate loans grew by 0,9% QoQ.
Credit Restructured
As of 30 June 2020, Restructured loans were Rp 69.3 tn, or 12% of total loans. The restructuring scheme involves extension of terms, as well as deferring principal & interest payments. Mortgages, consumer and auto loans are mostly restructured with extensions. As of July 2020 BBCA has worked on loan restructuring proposals for Rp 116tn, or 20% of the total large loans; 35% of consumer loans and 18% of the total corporate loans. We estimate that 20%-30% of total loans will be restructured in FY2020. We predict restructuring will have an impact on the Net Interest Margin with an increase in the range of 6%.
Lower Net Income
Net Income decreased -14% QoQ. The decrease was caused by Provision Costs which rose because of the ongoing restructuring. Pre-Provision Operational Profits increased significantly by 13% QoQ because of both higher Net Interest Income and Non-Interest Income.
Valuation: 12% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 34,690, or trading at 3.8x PBV which gives 12% potential upside, Hold.
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