Contact our analyst Achmadi
26% upside, Buy
15th November, 2023
Target price Rp11,400
Net Profit Surges 26%
In the 9M-2023 period, BBCA achieved robust net income growth of 25.78% YoY, to IDR 36.42 trillion. Interest income rose by 24.17% YoY to IDR 64.61 trillion, supporting a 10-bps increase in the NIM ratio to 5.50%, despite a 10-bps quarterly decrease. Net income from transactions at fair value through profit or loss experienced 51% annual growth. We predict a further 14.42% YoY growth in net profit for FY23, reaching IDR 46.61 trillion.
Solid Loan Expansion
As of September 2023, BBCA reported a strong 12.33% YoY increase in consolidated loans. The Consumer segment led with 14.93% YoY growth, while Corporate and Commercial&SME also grew significantly at 12.23% and 10.93% respectively. We anticipate a continued 10.72% expansion in BBCA's loan portfolio in FY23.
Good Asset Quality
By September 2023, BBCA's Consolidated Non-Performing Loan (NPL) ratio improved, decreasing by 20 bps annually to 2.00%. The Corporate segment saw the most significant improvement, decreasing by 25 bps YoY to 2.08%. The Special Mention Loan (SML) ratio improved 0.3% quarterly to 2.4%. We forecast BBCA's NPL ratio to align with regulations at 1.94% by December 2023, 6 bps lower than September 2023.
As of September 2023, BBCA's sustainable portfolio grew by 11.19% to IDR 193 trillion, comprising 25% of the total portfolio. Outstanding loans for EV financing surged 15 times YoY to IDR 877 billion. BBCA's commitment to ESG is evident not only in its loan portfolio but also through participation in Indonesia's first carbon trading exchange.
Valuation: 26% Upside, Buy
Based on our DDM valuation, we set a one-year target price of IDR 11,400, implying a valuation of 5.84x PBV and a potential upside of 26%. Consequently, we maintain a Buy rating for BBCA.