BBNI
Contact our analyst Achmadi Hangradhika
21% upside. Buy
4th November 2022
Price Rp9,275
Target price Rp11,240
Net Income grew +77%
In 9M22, Bank Negara Indonesia (BBNI) reported net income of IDR 13.69 trillion, up significantly +76.76% YoY from IDR 7.75 trillion in 9M21. The growth was driven by Non-Interest Income such as income from insurance premiums and investment income, which grew +19.64% yoy. Net interest income grew too, but not significantly. It only grew 5.23% YoY. We forecast BBNI will continue to improve performance and grow its Net Income by +72.93% YoY from IDR 10.90 trillion in FY21 to IDR 18.85 in FY22.
Strong Loan Growth
As of September 2022, BBNI recorded strong consolidated loan growth of +9.11% YoY. All of the four segments served by BBNI had positive loan growth. The fastest growth was from consumer lending, which grew +11.24% boosted by Payroll Loans. Others, like Corporate, Small and Medium loans, grew +10.54%, 8.15%, and 1.60% respectively. The growth was also driven by BBNI’s strategy which is to increase its lending to top tier clients. We project BBNI will grow its gross loans by +7.74% YoY in FY22.
Improved Asset Quality
In 9M22, BBNI improved its asset quality with the Bank Only NPL ratio declining by -80 bps to 3.00%. Consumer loans have the lowest NPL ratio at 1.90%, down -72 bps from 9M21. The NPL ratios for Corporate, Small, and Medium loans were 2.30%, 2.60%, and 6.90% respectively. We forecast BBNI will improve its NPL ratio by another -79 bps to 2.91% in FY22.
Valuation: 21% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 11,240 or trading at 1.7x PBV which gives 21% potential upside, Buy.
In 9M22, Bank Negara Indonesia (BBNI) reported net income of IDR 13.69 trillion, up significantly +76.76% YoY from IDR 7.75 trillion in 9M21. The growth was driven by Non-Interest Income such as income from insurance premiums and investment income, which grew +19.64% yoy. Net interest income grew too, but not significantly. It only grew 5.23% YoY. We forecast BBNI will continue to improve performance and grow its Net Income by +72.93% YoY from IDR 10.90 trillion in FY21 to IDR 18.85 in FY22.
Strong Loan Growth
As of September 2022, BBNI recorded strong consolidated loan growth of +9.11% YoY. All of the four segments served by BBNI had positive loan growth. The fastest growth was from consumer lending, which grew +11.24% boosted by Payroll Loans. Others, like Corporate, Small and Medium loans, grew +10.54%, 8.15%, and 1.60% respectively. The growth was also driven by BBNI’s strategy which is to increase its lending to top tier clients. We project BBNI will grow its gross loans by +7.74% YoY in FY22.
Improved Asset Quality
In 9M22, BBNI improved its asset quality with the Bank Only NPL ratio declining by -80 bps to 3.00%. Consumer loans have the lowest NPL ratio at 1.90%, down -72 bps from 9M21. The NPL ratios for Corporate, Small, and Medium loans were 2.30%, 2.60%, and 6.90% respectively. We forecast BBNI will improve its NPL ratio by another -79 bps to 2.91% in FY22.
Valuation: 21% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 11,240 or trading at 1.7x PBV which gives 21% potential upside, Buy.
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