BBCA
Contact our analyst Lingga
9% upside, Hold.
26th October, 2021
Price Rp7525
Target price Rp8200
Corporate Loan growth
In 3Q21, Loan growth was 4.5% YoY. This was driven by a 7.1% YoY growth in corporate loans to the Tower, CPO, and pulp & paper sectors. Consumer loans rose 2.1% YoY thanks to the BCA Expoversary event earlier in the year. Another virtual consumer loan expo was held in July and will be extended until November. Commercial loans grew by 1.5% YoY. Management is optimistic that credit demand will continue to improve, given that economic activity is recovering following the easing of the lockdowns. We estimate loan growth at 4.27% in 2021F in line with BBCA management guidance of 4-6%.
CASA Up Significantly
Customer deposits grew strongly +18.3% YoY with CASA up by +21.1% YoY driven by increased transaction limits for its mobile banking application, and acceptance of new customers at its digital bank. Time Deposits grew by 9.7% YoY. BBCA currently has 215 thousand digital banking BLU subscribers, 30% of which are BCA customers. In September, BLU had total funding of IDR 800 billion. BCA has increased BLU's capital level to IDR 4 trillion from IDR 1.3 trillion previously, and plans to list BLU on the Indonesia Stock Exchange in the next 1-2 years.
Asset quality continues to improve
The total loans for restructuring continues to improve at IDR 88.9 trillion as of September 2021 or 15% of the total loans. The previous amount was IDR 97.7 trillion in June 2021 or 19% of total loans. This improvement was due to some customers returning to normal payments. This is in line with the previous management target. NPLs were flat on a quarterly basis and slightly increased to 0.5% YoY, Loan at Risk increased to 1.4% YoY. LAR coverage increased to 35.1% from 32% in 2Q21.
Valuation: 9% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 8,200 or trading at 1.0x PBV which gives 9% potential upside, Hold.
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