BJBR
Contact our analyst achmadi
10% upside, Hold
30th December 2024
Price Rp 910
Target price Rp1000
Another Decline in Net Income
In 9M-2024, BJBR reported an 18.95% YoY drop in Net Income Attributable to the Parent Entity, amounting to IDR 1.16 trillion. This decline was primarily driven by a 7.48% YoY increase in interest expense, which offset the 10.59% YoY growth in interest income. Consequently, Net Interest Income decreased by 7.48% YoY, with the NIM ratio falling by 106 bps YoY to 3.80%. Additionally, provision expenses surged by 21.38% YoY, further eroding profitability. For FY2024, we project Net Income Attributable to the Parent Entity to decrease by 25.44% YoY, reaching IDR 1.33 trillion, with a NIM ratio of 3.59%.
Loan Growth Supported by KUB and Sustainable Financing
As of September 2024, BJBR’s consolidated loan portfolio grew by 10.45% YoY, driven by 94.69% YoY growth in non-bank (subsidiary) lending, primarily through the KUB initiative. The corporate segment led the way with an 8.98% YoY increase. Additionally, sustainable financing grew solidly at 15.1% YoY, reflecting the bank’s ongoing commitment to ESG principles. By December 2024, we anticipate consolidated loans to expand further by 13.49% YoY, with non-bank lending expected to grow by an impressive 107.05% YoY.
Deposit Growth Outpaces Loans
BJBR’s consolidated deposits showed robust 17.10% YoY growth as of September 2024, surpassing loan growth. The savings segment recorded the highest increase at 31.06% YoY, followed by current accounts, which grew by 16.55% YoY. This expansion lifted the CASA ratio by 220 bps YoY to 44.9%, while time deposits rose by 12.20% YoY. We expect customer deposits to grow further by 15.63% YoY by December 2024, with the CASA ratio reaching 45.03%.
Progress in KUB Formation
BJBR continues its KUB expansion strategy, completing a modified acquisition of Bank Bengkulu. Preparations are underway for Bank Jambi and Bank Maluku Malut to join the group. Bank Jambi is undergoing a Fit and Proper Test after receiving a capital injection of IDR 221.4 billion, while Bank Maluku Malut is in the Due Diligence and Shareholders Agreement stage.
Valuation: 10%, Upside, HOLD
Using a DDM valuation model, we have set a target price of IDR 1,000 within a year, representing a 0.62x PBV valuation and a 10% upside potential. Given this limited upside, we assign a “Hold” rating for the stock.
In 9M-2024, BJBR reported an 18.95% YoY drop in Net Income Attributable to the Parent Entity, amounting to IDR 1.16 trillion. This decline was primarily driven by a 7.48% YoY increase in interest expense, which offset the 10.59% YoY growth in interest income. Consequently, Net Interest Income decreased by 7.48% YoY, with the NIM ratio falling by 106 bps YoY to 3.80%. Additionally, provision expenses surged by 21.38% YoY, further eroding profitability. For FY2024, we project Net Income Attributable to the Parent Entity to decrease by 25.44% YoY, reaching IDR 1.33 trillion, with a NIM ratio of 3.59%.
Loan Growth Supported by KUB and Sustainable Financing
As of September 2024, BJBR’s consolidated loan portfolio grew by 10.45% YoY, driven by 94.69% YoY growth in non-bank (subsidiary) lending, primarily through the KUB initiative. The corporate segment led the way with an 8.98% YoY increase. Additionally, sustainable financing grew solidly at 15.1% YoY, reflecting the bank’s ongoing commitment to ESG principles. By December 2024, we anticipate consolidated loans to expand further by 13.49% YoY, with non-bank lending expected to grow by an impressive 107.05% YoY.
Deposit Growth Outpaces Loans
BJBR’s consolidated deposits showed robust 17.10% YoY growth as of September 2024, surpassing loan growth. The savings segment recorded the highest increase at 31.06% YoY, followed by current accounts, which grew by 16.55% YoY. This expansion lifted the CASA ratio by 220 bps YoY to 44.9%, while time deposits rose by 12.20% YoY. We expect customer deposits to grow further by 15.63% YoY by December 2024, with the CASA ratio reaching 45.03%.
Progress in KUB Formation
BJBR continues its KUB expansion strategy, completing a modified acquisition of Bank Bengkulu. Preparations are underway for Bank Jambi and Bank Maluku Malut to join the group. Bank Jambi is undergoing a Fit and Proper Test after receiving a capital injection of IDR 221.4 billion, while Bank Maluku Malut is in the Due Diligence and Shareholders Agreement stage.
Valuation: 10%, Upside, HOLD
Using a DDM valuation model, we have set a target price of IDR 1,000 within a year, representing a 0.62x PBV valuation and a 10% upside potential. Given this limited upside, we assign a “Hold” rating for the stock.
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