BJBR
Contact our analyst achmadi
52% upside, Buy
4th August 2022
Price Rp1,360
Target price Rp2,070
Net Income grew +29.58%
BJBR recorded net income of DR 1.198 trillion up 29.58% YoY from DR 0.924 trillion in 1H2021. Growth was supported by higher net interest income which increased by 10.89%YoY from IDR 3 69 trillion to IDR 4.10 trillion. BJBR's strong performance was also driven by digitalization through DIGI by Bank BJB and QRIS Merchants, The CASA ratio rose also from 43.30% in 1H2021 to 46.70% in 1H2022. We project BJBR will increase its Net Income by +23.76% this year from IDR 2 02 trillion in 2021 to IDR 2 52 trillion in 2022.
Strong Growth from Commercial loans
BJBR had loan growth of 12.90% YoY in 1H22. The growth was driven by Commercial Loans which grew 42.39% YoY. Other segments increased too Mortgage, Micro, and Consumer loans grew by 16.83%, 11.22%, and 4.18%. We predict Total Gross Loans will grow 10.97% in 2022 with the Commercial Segment growing fastest at 24.96% compared to the previous year.
Asset Quality Improved
BJBR improved its asset quality with the gross NPL ratio declining from 1.34% to 1.10%. Of the four segments that are served by BJBR, only one segment, Consumer lending had a NPL ratio increase from 0.15% to 0.22%. Commercial loans had the largest improvements with the NPL ratio declining from 4.16% to 2.64%. The NPL ratios from Mortgage and Micro loans were 2.68% and 1.77% respectively. The asset quality improvement was also seen by a decrease in the Special Mention Loans Ratio which declined from 2.86% to 2.19%. We estimate BJBR's NPL and SML ratio will decline again to 1.25%and 2.06% respectively.
Valuation: 52% Upside potential, Buy
Based on our DDM Valuation, we have a target price of IDR 2,070 within a year, or trading at 1,5x PBV. A 52% potential upside, Buy.
BJBR recorded net income of DR 1.198 trillion up 29.58% YoY from DR 0.924 trillion in 1H2021. Growth was supported by higher net interest income which increased by 10.89%YoY from IDR 3 69 trillion to IDR 4.10 trillion. BJBR's strong performance was also driven by digitalization through DIGI by Bank BJB and QRIS Merchants, The CASA ratio rose also from 43.30% in 1H2021 to 46.70% in 1H2022. We project BJBR will increase its Net Income by +23.76% this year from IDR 2 02 trillion in 2021 to IDR 2 52 trillion in 2022.
Strong Growth from Commercial loans
BJBR had loan growth of 12.90% YoY in 1H22. The growth was driven by Commercial Loans which grew 42.39% YoY. Other segments increased too Mortgage, Micro, and Consumer loans grew by 16.83%, 11.22%, and 4.18%. We predict Total Gross Loans will grow 10.97% in 2022 with the Commercial Segment growing fastest at 24.96% compared to the previous year.
Asset Quality Improved
BJBR improved its asset quality with the gross NPL ratio declining from 1.34% to 1.10%. Of the four segments that are served by BJBR, only one segment, Consumer lending had a NPL ratio increase from 0.15% to 0.22%. Commercial loans had the largest improvements with the NPL ratio declining from 4.16% to 2.64%. The NPL ratios from Mortgage and Micro loans were 2.68% and 1.77% respectively. The asset quality improvement was also seen by a decrease in the Special Mention Loans Ratio which declined from 2.86% to 2.19%. We estimate BJBR's NPL and SML ratio will decline again to 1.25%and 2.06% respectively.
Valuation: 52% Upside potential, Buy
Based on our DDM Valuation, we have a target price of IDR 2,070 within a year, or trading at 1,5x PBV. A 52% potential upside, Buy.
Previously