BBRI
Contact our analyst Lingga
9% UPSIDE, Hold
15th February 2021
Price Rp4710
Target price Rp5130
Lower Net Profit
BBRI's net profit fell 46% YoY, Net Interest Income decreased 4.3% YoY due to decreased interest income by 4.9%. PPOP also fell 11% YoY. However, on a quarterly basis, there has been improvement, with net profit positive growth of 12%, interest income growth of 5.35%, and PPOP has increased by 37.4%. This is despite higher provisions, which increased significantly by 42% QoQ and 45.4% YoY. We estimates net profit will grow by 10% YoY in FY21F
Loan and Third-Party Funds growth
Loans grew by 2.5% in FY20. This growth was largely driven by micro loans, 14.2% and consumer loans, 2.3%. BBRI saw an increase in loan demand at the end of 3Q20, especially in the micro-segment. As a result of this achievement, BBRI set a new target for micro loans to reach a 45% proportion of total loans of by 2025. Thrid-Party Funds increased by 8.6% YoY with demand deposits up 9%, time deposits down -3.3%, and savings up 13.6%. This meant that the Loan to Deposit Ratio is still moderate at 83.66%. Low cost (CASA) funds increased by 61% from 59% in FY19.
Credit Restructuring and Asset Quality
Restructuring of loans was at IDR 186.6 trillion or 21.2% of total loans. The share of the total restructured loans is Micro 44%, Small Commercial 43%, Consumer 6%, Corporate, and SOE 5%. For Asset quality, gross NPL fell -8bps QoQ to 2.94%. Meanwhile, the NPL coverage ratio rose + 24ppt QoQ to 248% with a Loan at Risk coverage of 25.7% (+ 4ppt QoQ).
Valuation: 9%, Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR. 5,130 or trading at 3,4x PBV which gives 9% potential upside, Hold.
BBRI's net profit fell 46% YoY, Net Interest Income decreased 4.3% YoY due to decreased interest income by 4.9%. PPOP also fell 11% YoY. However, on a quarterly basis, there has been improvement, with net profit positive growth of 12%, interest income growth of 5.35%, and PPOP has increased by 37.4%. This is despite higher provisions, which increased significantly by 42% QoQ and 45.4% YoY. We estimates net profit will grow by 10% YoY in FY21F
Loan and Third-Party Funds growth
Loans grew by 2.5% in FY20. This growth was largely driven by micro loans, 14.2% and consumer loans, 2.3%. BBRI saw an increase in loan demand at the end of 3Q20, especially in the micro-segment. As a result of this achievement, BBRI set a new target for micro loans to reach a 45% proportion of total loans of by 2025. Thrid-Party Funds increased by 8.6% YoY with demand deposits up 9%, time deposits down -3.3%, and savings up 13.6%. This meant that the Loan to Deposit Ratio is still moderate at 83.66%. Low cost (CASA) funds increased by 61% from 59% in FY19.
Credit Restructuring and Asset Quality
Restructuring of loans was at IDR 186.6 trillion or 21.2% of total loans. The share of the total restructured loans is Micro 44%, Small Commercial 43%, Consumer 6%, Corporate, and SOE 5%. For Asset quality, gross NPL fell -8bps QoQ to 2.94%. Meanwhile, the NPL coverage ratio rose + 24ppt QoQ to 248% with a Loan at Risk coverage of 25.7% (+ 4ppt QoQ).
Valuation: 9%, Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR. 5,130 or trading at 3,4x PBV which gives 9% potential upside, Hold.
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