BBNI
Contact our analyst Achmadi Hangradhika
15% upside. Buy
1st November, 2024
Price Rp5200
Target price Rp5975
Stagnant PATMI Growth
In the first nine months of 2024, BBNI’s Profit After Tax and Minority Interest (PATMI) demonstrated limited growth, rising just 3.52% YoY to IDR 16.308 trillion. This modest increase was largely attributed to a 28.71% YoY surge in Interest Expense, which countered the 5.66% YoY rise in Interest Income, resulting in a 5.45% YoY decline in Net Interest Income. However, Other Operating Income increased by 14.93% YoY, supporting overall performance. The highest boost came from Unrealized Gains on Financial Assets at FVTPL, which soared 75.28% YoY. Additionally, provisions and non-loan transaction commissions were key contributors to Other Operating Income, collectively amounting to IDR 7.47 trillion. We project BBNI’s PATMI to reach IDR 21.61 trillion by year-end 2024, reflecting a 3.35% increase from 2023.
Credit Expansion Remains Solid and Aligned with ESG Commitment
As of September 2024, BBNI’s consolidated loan portfolio expanded by 9.48% YoY to IDR 735.02 trillion, slightly under the revised target range of 10-12% YoY. This underperformance was driven by contractions in the Small and Medium segments, which shrank 11.66% and 5.12% YoY, respectively, as BBNI focused on enhancing loan quality within the SME category, where non-performing loans (NPLs) remain elevated. In contrast, the Corporate and Commercial segments exhibited robust growth of 15.11% and 14.64% YoY, respectively. The green portfolio grew by 17% YoY to IDR 70.9 trillion, driven by sustainable investments in natural resources and land use, which surged 48.6% YoY. Overall, BBNI’s sustainable loans amounted to IDR 187.6 trillion, representing 26% of bank-only loans and reinforcing its ESG commitment. By December 31, 2024, we expect the consolidated loan portfolio to grow by 9.16% YoY, reaching IDR 758.72 trillion.
Improved NPL Ratio
As of September 2024, BBNI’s bank-only gross NPL ratio improved to 2%, a 30-bps decrease YoY, although it remained steady from the previous quarter. The Corporate segment continued to be the strongest, with an NPL ratio of just 1%. Meanwhile, the Medium segment recorded notable progress, with its NPL ratio dropping by 1.1% YoY to 4.6%. We anticipate further improvement, with the gross NPL ratio expected to decline by 24 bps to 1.86% by December 2024.
Strong CASA Ratio Boosted by ‘wondr’
BBNI’s CASA ratio stood at 70.30% as of September 2024, reflecting a robust 170-bps increase YoY, although it dipped slightly by 40 bps QoQ. This improvement was driven by a 7.44% YoY increase in savings accounts, supported by the success of BBNI’s mobile banking platform, “wondr,” which contributed around 70% of retail savings. We project the CASA ratio to reach 70.31% by December 31, 2024.
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Valuation: 15% Upside, Buy.
Utilizing a multi-stage Dividend Discount Model (DDM), we have updated our one-year target price to IDR 5,975, reflecting a PBV multiple of 1.32x and offering a 15% upside potential. Consequently, we recommend a Buy.
In the first nine months of 2024, BBNI’s Profit After Tax and Minority Interest (PATMI) demonstrated limited growth, rising just 3.52% YoY to IDR 16.308 trillion. This modest increase was largely attributed to a 28.71% YoY surge in Interest Expense, which countered the 5.66% YoY rise in Interest Income, resulting in a 5.45% YoY decline in Net Interest Income. However, Other Operating Income increased by 14.93% YoY, supporting overall performance. The highest boost came from Unrealized Gains on Financial Assets at FVTPL, which soared 75.28% YoY. Additionally, provisions and non-loan transaction commissions were key contributors to Other Operating Income, collectively amounting to IDR 7.47 trillion. We project BBNI’s PATMI to reach IDR 21.61 trillion by year-end 2024, reflecting a 3.35% increase from 2023.
Credit Expansion Remains Solid and Aligned with ESG Commitment
As of September 2024, BBNI’s consolidated loan portfolio expanded by 9.48% YoY to IDR 735.02 trillion, slightly under the revised target range of 10-12% YoY. This underperformance was driven by contractions in the Small and Medium segments, which shrank 11.66% and 5.12% YoY, respectively, as BBNI focused on enhancing loan quality within the SME category, where non-performing loans (NPLs) remain elevated. In contrast, the Corporate and Commercial segments exhibited robust growth of 15.11% and 14.64% YoY, respectively. The green portfolio grew by 17% YoY to IDR 70.9 trillion, driven by sustainable investments in natural resources and land use, which surged 48.6% YoY. Overall, BBNI’s sustainable loans amounted to IDR 187.6 trillion, representing 26% of bank-only loans and reinforcing its ESG commitment. By December 31, 2024, we expect the consolidated loan portfolio to grow by 9.16% YoY, reaching IDR 758.72 trillion.
Improved NPL Ratio
As of September 2024, BBNI’s bank-only gross NPL ratio improved to 2%, a 30-bps decrease YoY, although it remained steady from the previous quarter. The Corporate segment continued to be the strongest, with an NPL ratio of just 1%. Meanwhile, the Medium segment recorded notable progress, with its NPL ratio dropping by 1.1% YoY to 4.6%. We anticipate further improvement, with the gross NPL ratio expected to decline by 24 bps to 1.86% by December 2024.
Strong CASA Ratio Boosted by ‘wondr’
BBNI’s CASA ratio stood at 70.30% as of September 2024, reflecting a robust 170-bps increase YoY, although it dipped slightly by 40 bps QoQ. This improvement was driven by a 7.44% YoY increase in savings accounts, supported by the success of BBNI’s mobile banking platform, “wondr,” which contributed around 70% of retail savings. We project the CASA ratio to reach 70.31% by December 31, 2024.
.
Valuation: 15% Upside, Buy.
Utilizing a multi-stage Dividend Discount Model (DDM), we have updated our one-year target price to IDR 5,975, reflecting a PBV multiple of 1.32x and offering a 15% upside potential. Consequently, we recommend a Buy.
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