BBNI
Contact our analyst Achmadi Hangradhika
20% upside. Buy
10th February 2023
Price Rp9,525
Target price Rp11,420
Net Income grew +68%
In 2022, Bank Negara Indonesia (BBNI) reported a net income of IDR 18.31 trillion, a significant increase of 68.02% YoY from IDR 10.90 trillion in 2021. The growth was driven by operating income, such as income from investment in associates, which grew by 55.09% YoY, and income from syndication, which grew by 100.60% YoY. BBNI's net interest income also grew, by 5.23% YoY. The highest contributors were loans and government bonds, accounting for 84.34% and 9.84% respectively, while the highest growth was seen in other interest income and placement from other banks and Bank Indonesia, which grew by 473.89% and 130.29% respectively. We forecast that BBNI will continue to improve its performance, growing its net income by 32.34% YoY from IDR 18.31 trillion in FY22 to IDR 24.24 in FY23.
Strong Loan Growth
As of December 2022, BBNI recorded a strong consolidated loan growth of 10.95% YoY. All four segments served by BBNI showed positive loan growth, with the fastest growth seen in corporate lending, which grew by 12.84% YoY, boosted by loans from private companies, which showed the highest growth at 28.9% YoY. The other segments, such as consumer, medium, and small loans, grew by 11.21%, 7.27%, and 6.05% respectively. We project that BBNI will grow its consolidated gross loans by 12.23% YoY in FY22.
Improved Asset Quality
As of 2022, BBNI improved its asset quality, with the bank-only NPL ratio declining by 90 basis points to 2.80% compared to the previous year. Consumer loans had the lowest NPL ratio at 1.70%, down 59 basis points from FY21. The NPL ratios for corporate, small, and medium loans were 2.10%, 2.50%, and 6.40% respectively. We forecast that BBNI will further improve its bank-only NPL ratio to 2.24% in FY22.
Valuation: 20% Upside, Buy.
Based on our DDM valuation, we have a one-year target price of IDR 11,420, which means trading at a PBV multiple of 1.7X. With 20% potential upside, we recommend a "Buy" rating.
In 2022, Bank Negara Indonesia (BBNI) reported a net income of IDR 18.31 trillion, a significant increase of 68.02% YoY from IDR 10.90 trillion in 2021. The growth was driven by operating income, such as income from investment in associates, which grew by 55.09% YoY, and income from syndication, which grew by 100.60% YoY. BBNI's net interest income also grew, by 5.23% YoY. The highest contributors were loans and government bonds, accounting for 84.34% and 9.84% respectively, while the highest growth was seen in other interest income and placement from other banks and Bank Indonesia, which grew by 473.89% and 130.29% respectively. We forecast that BBNI will continue to improve its performance, growing its net income by 32.34% YoY from IDR 18.31 trillion in FY22 to IDR 24.24 in FY23.
Strong Loan Growth
As of December 2022, BBNI recorded a strong consolidated loan growth of 10.95% YoY. All four segments served by BBNI showed positive loan growth, with the fastest growth seen in corporate lending, which grew by 12.84% YoY, boosted by loans from private companies, which showed the highest growth at 28.9% YoY. The other segments, such as consumer, medium, and small loans, grew by 11.21%, 7.27%, and 6.05% respectively. We project that BBNI will grow its consolidated gross loans by 12.23% YoY in FY22.
Improved Asset Quality
As of 2022, BBNI improved its asset quality, with the bank-only NPL ratio declining by 90 basis points to 2.80% compared to the previous year. Consumer loans had the lowest NPL ratio at 1.70%, down 59 basis points from FY21. The NPL ratios for corporate, small, and medium loans were 2.10%, 2.50%, and 6.40% respectively. We forecast that BBNI will further improve its bank-only NPL ratio to 2.24% in FY22.
Valuation: 20% Upside, Buy.
Based on our DDM valuation, we have a one-year target price of IDR 11,420, which means trading at a PBV multiple of 1.7X. With 20% potential upside, we recommend a "Buy" rating.
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