BJBR
Contact our analyst Lingga
29% upside
1st Aug 2020
Price Rp 935
Target price Rp1,210
Loans still growing
Loans grew 9.15% YoY driven by Commercial which grew 23.7% and came mainly from state-owned pharmaceutical and medical device companies. Consumer loans grew 7.8%, Micro 4.9%, and Mortgages 6.2%. BJBR has received a deposit from the government of IDR. 2.5 trillion at an interest rate of 3.2% which will be allocated for both micro and commercial financing. We estimate loan growth will be 5.3%
NIM dropped slightly
Net Interest Margin decreased by only 10Bps to 5.60% compared to 5.5% in 1Q20. The decline was lower than other banks, due to a relatively small loan restructuring of IDR. 1.9 Trillion comprising 6,500 borrowers, 20% from the Commercial Segment, Mortgages 8.3%, Consumer 0.2%, and Micro 14%. BJBR still has IDR. 4 trillion or 4.8% of total loans which needs to be restructured by the end of this year, these loans are from commercial ,20%, micro 14%, MSME 14% and consumer only 0,2%. They come from areas which have seen a very limited impact from the virus and most are civil servant loans with a fixed interest rate.
BEKS merger option
The potential merger of BEKS and BJBR is still in process and due diligence will be completed in July, with ratification at the RUPS on September 1, 2020, through approval by shareholders. BEKS is still in the process of trying to improve its capital, with merger as the last option.
Valuation: 29% Upside potential, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 1,210, which would mean the shares trading at 0.6x PBV and gives 29% upside potential. Buy.
Loans grew 9.15% YoY driven by Commercial which grew 23.7% and came mainly from state-owned pharmaceutical and medical device companies. Consumer loans grew 7.8%, Micro 4.9%, and Mortgages 6.2%. BJBR has received a deposit from the government of IDR. 2.5 trillion at an interest rate of 3.2% which will be allocated for both micro and commercial financing. We estimate loan growth will be 5.3%
NIM dropped slightly
Net Interest Margin decreased by only 10Bps to 5.60% compared to 5.5% in 1Q20. The decline was lower than other banks, due to a relatively small loan restructuring of IDR. 1.9 Trillion comprising 6,500 borrowers, 20% from the Commercial Segment, Mortgages 8.3%, Consumer 0.2%, and Micro 14%. BJBR still has IDR. 4 trillion or 4.8% of total loans which needs to be restructured by the end of this year, these loans are from commercial ,20%, micro 14%, MSME 14% and consumer only 0,2%. They come from areas which have seen a very limited impact from the virus and most are civil servant loans with a fixed interest rate.
BEKS merger option
The potential merger of BEKS and BJBR is still in process and due diligence will be completed in July, with ratification at the RUPS on September 1, 2020, through approval by shareholders. BEKS is still in the process of trying to improve its capital, with merger as the last option.
Valuation: 29% Upside potential, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 1,210, which would mean the shares trading at 0.6x PBV and gives 29% upside potential. Buy.
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