BBRI
Contact our analyst achmadi
28% UPSIDE, BUY
14th October 2022
Price Rp4,270
Target price Rp5480
98.72% Net Income Growth
In 1H2022, BBRI reported very strong net income growth, up by +98.72% yoy from IDR 12,473 trillion in 1H21 to IDR 24,786 trillion in 1H22. This makes BBRI the fastest growing among the big banks in terms of net income growth. The growth was driven by the high interest income and premium income which grew by 28.37% and 49.03% yoy respectively. We forecast BBRI will continue to improve net income with growth of +55.94% yoy from IDR 31.07 trillion in FY21 to IDR 48.45 in FY22.
Solid Loan Growth
In the first semester of 2022, BBRI recorded solid gross loan growth of +10.04% yoy (Bank Only). Micro loans had the fastest loan growth at +16.01% due to digitalization and BBRI’s strategy to “Go Smaller, Go Shorter, and Go Faster”. Small, Corporate, and Consumer loans grew 7.29%, 6.13 and 5.41%, respectively, while medium loans had negative growth of -2.38%. We project BBRI will continue to grow its gross loans by 11.07% yoy in FY22.
Slightly higher NPLs
In 1H2022, BBRI’s NPL ratio was higher than 1H2021 up by +5 bps to 3.32%. Consumer loans are the best performing with a 2.00% NPL ratio, although this was higher than 1H202, an increase of +21 bps. Micro, Medium, Small, and Corporate loans had NPL ratios of 2.21%, 3.83%, 4.71%, and 5.25% respectively. We forecast that BBRI will improve its NPL ratio by -18bps to 2.90% in FY2022.
Valuation: 28%, Upside, Buy
Based on our DDM Valuation, we have a target price within one year of IDR 5,480 or trading at 2.6x PBV which gives 28% potential upside, Buy.
In 1H2022, BBRI reported very strong net income growth, up by +98.72% yoy from IDR 12,473 trillion in 1H21 to IDR 24,786 trillion in 1H22. This makes BBRI the fastest growing among the big banks in terms of net income growth. The growth was driven by the high interest income and premium income which grew by 28.37% and 49.03% yoy respectively. We forecast BBRI will continue to improve net income with growth of +55.94% yoy from IDR 31.07 trillion in FY21 to IDR 48.45 in FY22.
Solid Loan Growth
In the first semester of 2022, BBRI recorded solid gross loan growth of +10.04% yoy (Bank Only). Micro loans had the fastest loan growth at +16.01% due to digitalization and BBRI’s strategy to “Go Smaller, Go Shorter, and Go Faster”. Small, Corporate, and Consumer loans grew 7.29%, 6.13 and 5.41%, respectively, while medium loans had negative growth of -2.38%. We project BBRI will continue to grow its gross loans by 11.07% yoy in FY22.
Slightly higher NPLs
In 1H2022, BBRI’s NPL ratio was higher than 1H2021 up by +5 bps to 3.32%. Consumer loans are the best performing with a 2.00% NPL ratio, although this was higher than 1H202, an increase of +21 bps. Micro, Medium, Small, and Corporate loans had NPL ratios of 2.21%, 3.83%, 4.71%, and 5.25% respectively. We forecast that BBRI will improve its NPL ratio by -18bps to 2.90% in FY2022.
Valuation: 28%, Upside, Buy
Based on our DDM Valuation, we have a target price within one year of IDR 5,480 or trading at 2.6x PBV which gives 28% potential upside, Buy.
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