BBTN
Contact our analyst Lingga
19% Upside. Hold.
26th October 2021
Price Rp1805
Target price Rp2140
Strong Profit Growth
Bank Tabungan Negara (BBTN) recorded net profit of IDR 1.5 trillion, up 35.32% YoY in 9M21, supported by Net Interest Income which grew 30.2% to IDR 8.8 trillion as NIM increased 39bps to 3.52%, driven by a lower Cost of Funds and thanks to stronger credit growth of 6% YoY.
Good Loan growth thanks to Subsidized Mortgages
In 3Q21, credit grew by 6% YoY. This growth was driven by subsidized mortgages which were up 11.7% YoY and Non-Subsidized Mortgages, up 2.11%. The Bank is more optimistic about 2022F loan growth, supported by the government's higher FLPP budget, and the Tapera scheme for civil servants. BBTN is looking to possible double digit credit growth next year.
Better Asset Quality amid Restructuring
In 3Q21, NPLs decreased to 3.94% from 4.56% in 3Q20. NPL coverage was higher at 125% in 3Q21 from 111% in 3Q20. The number of potential NPL downgrades also decreased to IDR 3.2 trillion or 6.5% of restructured loans in 3Q21 compared to IDR 3.5 trillion or 6.2% of loans restructured in 2Q21. Most of the improvements were in the core consumer segment, especially housing loans.
Valuation: 19% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 2,140 or trading at 0.9x PBV which gives 19% potential upside, Hold.
Bank Tabungan Negara (BBTN) recorded net profit of IDR 1.5 trillion, up 35.32% YoY in 9M21, supported by Net Interest Income which grew 30.2% to IDR 8.8 trillion as NIM increased 39bps to 3.52%, driven by a lower Cost of Funds and thanks to stronger credit growth of 6% YoY.
Good Loan growth thanks to Subsidized Mortgages
In 3Q21, credit grew by 6% YoY. This growth was driven by subsidized mortgages which were up 11.7% YoY and Non-Subsidized Mortgages, up 2.11%. The Bank is more optimistic about 2022F loan growth, supported by the government's higher FLPP budget, and the Tapera scheme for civil servants. BBTN is looking to possible double digit credit growth next year.
Better Asset Quality amid Restructuring
In 3Q21, NPLs decreased to 3.94% from 4.56% in 3Q20. NPL coverage was higher at 125% in 3Q21 from 111% in 3Q20. The number of potential NPL downgrades also decreased to IDR 3.2 trillion or 6.5% of restructured loans in 3Q21 compared to IDR 3.5 trillion or 6.2% of loans restructured in 2Q21. Most of the improvements were in the core consumer segment, especially housing loans.
Valuation: 19% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 2,140 or trading at 0.9x PBV which gives 19% potential upside, Hold.
