Contact our analyst Lingga
10% upside, Hold.
14th March, 2022
Target price Rp8700
Strong Net Income Growth
BBCA recorded a Net Profit of IDR 31.42 trillion in FY21 up 15.8% YoY from IDR 27.3 trillion in FY20. Net Interest income was up 3.5% YoY to IDR 5.5 trillion in FY21 supported by higher earning assets and strong CASA. Provisions and commissions increased 11.5% YoY to IDR 14.68 trillion in FY21, mainly from CASA transactions and trade finance. NIM decreased to 5% in FY21 on the back of lower asset yields from competitive loan pricing. For 2022, the bank targets a NIM of 4.9%-5% and we expect in the range of 5% as the bank sees limited room to increase loan yields as most banks will focus on loan growth in FY22.
Corporate Loan Growth
BBCA loans increased 8.7% YoY to IDR 637 trillion in 2021, driven by corporate loans up 12.3% YoY, while commercial, SME and consumer increased 4.8% YoY and 5.1% YoY, respectively. We estimate BBCA's loan growth will be in the range of 8% this year. FY21 loan growth was driven by telecommunications, infrastructure, nickel mining as well as consumer loans from mortgages. We also expect strong growth from commercial and SME loans this year as mobility increases.
Asset Quality Asset and Loan Restructured
NPLs decreased to 2.2% in FY21 from 2.4% in 3Q21. Special Mention Loans also decreased to 2% in FY21 from 2.8% in FY20. As of December 2021, loans under restructuring have continued to decline to IDR 64.9 trillion or 10% of total loans. Provisions brought NPL coverage to a strong 240% in 2021 in anticipation of any further deteriorating asset quality. We estimate that NPLs for this year will be in the range of 2%.
Valuation: 10% Upside, Hold
Based on our DDM Valuation, we have a target price within one year of IDR 8,700 or trading at 4.8x PBV which gives 10% potential upside, Hold.