BDMN
Contact our analyst Lingga
8% upside. Hold.
18th March, 2021
Price Rp3,100
Target price Rp3390
Net Income Decreased
Bank Danamon reported a loss of IDR 1 trillion , meaning FY20 net profit declined 75.3% YoY. This decrease was due to slow growth and high cost of credit.
Loan growth declined
In FY20, credit growth decreased by 6% YoY. SME loans were down 15% YoY, while Adira Finance credits were down 20% YoY. BDMN will focus on growth in the large corporate segment and blue-chip SOEs through collaboration with the MUFG network and will reduce lending in the ADMF and SME segments. We expect loans to grow to 5% YoY.
Restructured loans
As of December 31, 2020, the restructured loans were IDR 29.2 trillion, or 21.5% of the total loans. The restructuring scheme includes longer tenor, and reduced principal and interest payments. 65% of total restructured loans entered normal repayment by December. Of the total restructured loans, Adira Finance has had 34% of its loans restructured, while 16% of the bank loans were restructured, which are mostly from the SME segment. Meanwhile, 10% of corporate loans were restructured.
Valuation: 8% Upside, Hold.
Based on our DDM Valuation, we set a target price within one year of IDR 3,390, which means the shares will be traded at 0.7x PBV and gives 8% potential upside. Hold.
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