BBNI
Contact our analyst Lingga
25% upside. Buy
7th May, 2021
Price Rp5,700
Target price Rp7,110
Net Profit Increased Quarterly
In 1Q21, BBNI posted a net profit of IDR 2,39 billion or -43,9% YoY but up from a net loss of IDR -914Bn in 4Q20. This increase came from a significant decrease in Provisions of 43% QoQ and improvement in the cost of credit. Net Interest Income fell 2.5% QoQ as NIM fell 20bps to offset moderate credit growth, interest income was affected by restructured loans, and a lower return on assets. Non-Interest Income was also lower by -2.1% QoQ, as net premium income was down -37.3% QoQ and fees from trade finance -33% QoQ.
Loan growth
Loans growth of 2.2% YoY came from Private Corporate 2.1%, Small business 16.2% and Consumer 0.7%. BBNI's focus is on increasing bank exposure to safer loans through growth in private, small companies (especially retail KUR) and payroll loans. We estimate credit growth will be in the 6-7% range for FY21F.
Loan Restructuring and Asset Quality
In 1Q21, NPLs decreased slightly to 4.1% from 4.3% in FY20. Special Mention Loans rose to 5.6% from 5.1% in FY20 mainly from textile manufacturing companies. Debt restructuring decreased by 17.7% QoQ to IDR 84.3 trillion from IDR 102.4 trillion which is 15% of total loans. This decline mainly came from the corporate and small business segments as several corporate customers started repaying their loans.
Valuation: 25% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 7,100 or trading at 1.0x PBV which gives 25% potential upside, Buy.
In 1Q21, BBNI posted a net profit of IDR 2,39 billion or -43,9% YoY but up from a net loss of IDR -914Bn in 4Q20. This increase came from a significant decrease in Provisions of 43% QoQ and improvement in the cost of credit. Net Interest Income fell 2.5% QoQ as NIM fell 20bps to offset moderate credit growth, interest income was affected by restructured loans, and a lower return on assets. Non-Interest Income was also lower by -2.1% QoQ, as net premium income was down -37.3% QoQ and fees from trade finance -33% QoQ.
Loan growth
Loans growth of 2.2% YoY came from Private Corporate 2.1%, Small business 16.2% and Consumer 0.7%. BBNI's focus is on increasing bank exposure to safer loans through growth in private, small companies (especially retail KUR) and payroll loans. We estimate credit growth will be in the 6-7% range for FY21F.
Loan Restructuring and Asset Quality
In 1Q21, NPLs decreased slightly to 4.1% from 4.3% in FY20. Special Mention Loans rose to 5.6% from 5.1% in FY20 mainly from textile manufacturing companies. Debt restructuring decreased by 17.7% QoQ to IDR 84.3 trillion from IDR 102.4 trillion which is 15% of total loans. This decline mainly came from the corporate and small business segments as several corporate customers started repaying their loans.
Valuation: 25% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 7,100 or trading at 1.0x PBV which gives 25% potential upside, Buy.
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