Contact our analyst Lingga
13% upside. Hold.
11th December, 2020
Target price Rp3910
Higher net interest income
BDMN reported 9M20 net profit of Rp1.48tn, -43.1% YoY. Net Interest Income grew by 1% YoY, supported by a further decline in Cost of Credit by 48%, due to strong CASA, which in 9M20, was up 3.8% YoY. NIM contracted by 14bp QoQ due to lower yields. BDMN's focus on growth in large blue-chip companies and the SOE segment will be enhanced by collaboration with the MUFG network, and less lending to the ADMF and SME segments.
As of 30 Sep 2020, the amount of restructured loans reached IDR 29.6 trillion, equivalent to 21.4% of total loans. The restructuring scheme includes extended tenor, and deferred principal and interest payments. By segment, from IDR 29.6 trillion, 10% came from the enterprise banking segment, 23% from SMEs, 8% from consumers, and around 57% from Adira Finance. BDMN is targeting total restructured loans to reach 23% of total loans..
Loan Growth slightly decreased
Loans decreased -1% YoY, driven by ADMF which fell -15% YoY, as the amount of new financing was weaker at IDR 3.2tn 3Q20, but that’s up from only IDR 1.7tn in 2Q20. SME loans fell -15% YoY, Consumer fell -1% due to lower mortgages. Collaboration with the MUFG network has resulted in the Enterprise Banking segment growing +26% YoY.
Valuation: 13% Upside, Hold.
Based on our DDM Valuation, we set a target price within one year of IDR 3,910, which means the shares will be traded at 0.6x PBV and gives 13% potential upside. Hold.