BBCA
Contact our analyst Achmadi
15.70% upside, Buy
30th October, 2024
Price Rp10,350
Target price Rp11,975
BBCA 9M-2024: Sustaining Double-Digit Profit Growth
In 9M-2024, BBCA reported a net profit attributable to the parent entity of IDR 41.97 trillion, achieving a robust growth of 12.78% YoY. This growth was primarily driven by a 9.62% increase in Net Interest Income, reaching IDR 60.93 trillion. Additionally, net income from fair value transactions saw the highest growth, surging 89.82% YoY, further enhancing profitability. Conversely, provisions increased significantly by 60.15% YoY, despite asset recoveries as of September 2023, which reduced provisions by IDR 813.53 billion. For 2024, we project BBCA’s net profit attributable to the parent entity to reach IDR 55.67 trillion, marking a 14.45% increase, with Net Interest Income expected to grow by 9.32% to IDR 82.13 trillion.
Robust Credit Growth Aligned with ESG Commitments
As of September 2024, BBCA’s consolidated credit portfolio reached IDR 877.18 trillion, reflecting a strong 14.51% YoY growth, primarily driven by a 15.25% increase in corporate loans, underlining BBCA’s role in supporting the national economy. Sustainable financing also demonstrated strong growth at 10.7% YoY, with green financing at 40.65% and social financing at 59.35%. The natural resources and sustainable land use sectors dominated green financing, accounting for 71% of the total. We project the consolidated loan portfolio to reach IDR 899.99 trillion by year-end 2024, marking an 11.06% YoY increase.
Stable NPL Compared to Last Year
As of 9M-2024, BBCA’s consolidated NPL ratio remained stable at 2.1%, the same as 9M-2023, with a QoQ improvement of 10 bps. The bank-only figure was also stable but reflected a 10 bps increase YoY. The stable ratio was largely due to annual NPL increases in the Commercial & SME and Consumer segments, which rose to 2.85% and 1.85% from 2.37% and 1.52%, respectively. In contrast, corporate loans saw the most improvement, with NPLs down by 41 bps to 1.66%. We anticipate further improvements in the consolidated and bank-only NPL ratios by December 2024, reaching 2.04% and 2.00%, respectively.
Consistent CASA Growth with Solid Transaction Volume
As of September 2024, BBCA’s consolidated CASA balance reached IDR 915.33 trillion, up 5.24% YoY, with the CASA ratio increasing by 144 basis points to 81.32%. This growth was supported by a 21% YoY increase in transaction volume, reaching 26 billion transactions, driven largely by mobile and internet banking, which saw a 24% YoY growth to 23 billion transactions. The total transaction value grew 13% YoY to IDR 20,560 trillion, fueled by an increase in mobile and internet banking users to 31.1 million. We project the CASA position to grow by another 5.18% YoY by the end of 2024, comprising 81.37% of total third-party deposits.
Valuation: 15,70%, Upside, Buy
Based on our DDM valuation, we revise our one-year target price to IDR 11,975, implying a 5.60x PBV valuation and a potential upside of 15.70%. We, therefore, maintain our Buy recommendation.
In 9M-2024, BBCA reported a net profit attributable to the parent entity of IDR 41.97 trillion, achieving a robust growth of 12.78% YoY. This growth was primarily driven by a 9.62% increase in Net Interest Income, reaching IDR 60.93 trillion. Additionally, net income from fair value transactions saw the highest growth, surging 89.82% YoY, further enhancing profitability. Conversely, provisions increased significantly by 60.15% YoY, despite asset recoveries as of September 2023, which reduced provisions by IDR 813.53 billion. For 2024, we project BBCA’s net profit attributable to the parent entity to reach IDR 55.67 trillion, marking a 14.45% increase, with Net Interest Income expected to grow by 9.32% to IDR 82.13 trillion.
Robust Credit Growth Aligned with ESG Commitments
As of September 2024, BBCA’s consolidated credit portfolio reached IDR 877.18 trillion, reflecting a strong 14.51% YoY growth, primarily driven by a 15.25% increase in corporate loans, underlining BBCA’s role in supporting the national economy. Sustainable financing also demonstrated strong growth at 10.7% YoY, with green financing at 40.65% and social financing at 59.35%. The natural resources and sustainable land use sectors dominated green financing, accounting for 71% of the total. We project the consolidated loan portfolio to reach IDR 899.99 trillion by year-end 2024, marking an 11.06% YoY increase.
Stable NPL Compared to Last Year
As of 9M-2024, BBCA’s consolidated NPL ratio remained stable at 2.1%, the same as 9M-2023, with a QoQ improvement of 10 bps. The bank-only figure was also stable but reflected a 10 bps increase YoY. The stable ratio was largely due to annual NPL increases in the Commercial & SME and Consumer segments, which rose to 2.85% and 1.85% from 2.37% and 1.52%, respectively. In contrast, corporate loans saw the most improvement, with NPLs down by 41 bps to 1.66%. We anticipate further improvements in the consolidated and bank-only NPL ratios by December 2024, reaching 2.04% and 2.00%, respectively.
Consistent CASA Growth with Solid Transaction Volume
As of September 2024, BBCA’s consolidated CASA balance reached IDR 915.33 trillion, up 5.24% YoY, with the CASA ratio increasing by 144 basis points to 81.32%. This growth was supported by a 21% YoY increase in transaction volume, reaching 26 billion transactions, driven largely by mobile and internet banking, which saw a 24% YoY growth to 23 billion transactions. The total transaction value grew 13% YoY to IDR 20,560 trillion, fueled by an increase in mobile and internet banking users to 31.1 million. We project the CASA position to grow by another 5.18% YoY by the end of 2024, comprising 81.37% of total third-party deposits.
Valuation: 15,70%, Upside, Buy
Based on our DDM valuation, we revise our one-year target price to IDR 11,975, implying a 5.60x PBV valuation and a potential upside of 15.70%. We, therefore, maintain our Buy recommendation.
Previously