BBTN
Contact our analyst Lingga
11% Upside. Hold.
22nd February 2021
Price Rp1930
Target price Rp2140
Loan Growth increased slightly
In FY20, Loan Growth increased slightly, 1.7% YoY. The growth was driven by subsidized KPR loans which increased 8.63% YoY, but was offset by the decline in other segments that the bank remains selective in extending credit to. Subsidized mortgages remain the driver for the year, while exposure to high-rise construction will be avoided. We estimate loan growth will be in the range of 8% in 2021F, we hope that KPR credits will improve this year supported by Tapera.
Restructured Loans & Asset Quality
As of December 2020, the company restructured IDR 57.5 trillion or 22% of total loans. Restructured loans consisted of 33.5% non-subsidized KPR loans, 31.6% subsidized KPR loans, and 17.3% were construction and commercial loans. BBTN expects 80% will need further restructuring, 5% or IDR 2 trillion will be reduced, and 10% or IDR 4 trillion will return to normal payments. Non-Performing Loans decreased to 4.37% from 4.78% in FY2019. BBTN plans to increase non-performing loans by IDR 2.5 trillion this year and will continue to accelerate sales of collateral, especially for loans in the corporate segment. We estimate that Non-Performing Loans will be in the range of 3.7% in 2021F.
NIM decreased slightly
NIM fell to 3.06% from 3.32% in FY19. BTN will still maintain their strategy of focusing on low-cost funding. With the restructuring going well and the Cost of Funds being maintained, we expect NIM to be in the range of 3.3% in 2021F
Valuation: 11% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 2140 or trading at 1.0x PBV which gives 11% potential upside, Hold.
In FY20, Loan Growth increased slightly, 1.7% YoY. The growth was driven by subsidized KPR loans which increased 8.63% YoY, but was offset by the decline in other segments that the bank remains selective in extending credit to. Subsidized mortgages remain the driver for the year, while exposure to high-rise construction will be avoided. We estimate loan growth will be in the range of 8% in 2021F, we hope that KPR credits will improve this year supported by Tapera.
Restructured Loans & Asset Quality
As of December 2020, the company restructured IDR 57.5 trillion or 22% of total loans. Restructured loans consisted of 33.5% non-subsidized KPR loans, 31.6% subsidized KPR loans, and 17.3% were construction and commercial loans. BBTN expects 80% will need further restructuring, 5% or IDR 2 trillion will be reduced, and 10% or IDR 4 trillion will return to normal payments. Non-Performing Loans decreased to 4.37% from 4.78% in FY2019. BBTN plans to increase non-performing loans by IDR 2.5 trillion this year and will continue to accelerate sales of collateral, especially for loans in the corporate segment. We estimate that Non-Performing Loans will be in the range of 3.7% in 2021F.
NIM decreased slightly
NIM fell to 3.06% from 3.32% in FY19. BTN will still maintain their strategy of focusing on low-cost funding. With the restructuring going well and the Cost of Funds being maintained, we expect NIM to be in the range of 3.3% in 2021F
Valuation: 11% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 2140 or trading at 1.0x PBV which gives 11% potential upside, Hold.
