BJBR
Contact our analyst Lingga
17% upside
5 December, 2019
Price Rp1,570
Target price Rp1,840
Consumer Loan growth
- As of 3Q19, Total Gross Loans grew 9.8% YoY, up from 5.2% in 3Q18, Consumer Loans was the fastest growing segment, up by 13% YoY, as BJBR improved their one-day service, and loans to civil servants grew by 40,2% in 3Q19.
- The micro-segment grew by 9.4% YoY thanks to direct SME distribution.
- The commercial segment fell by 0.6% YoY due to the slowdown in the business cycle, dominated by the Construction sector which slowed by IDR. 6.67 Trillion.
- First time Mortgages grew by 8.2% YoY. We estimate Loan Growth in 2019-2020 will average 13% compared to 2018A.
Highest fee-based Income
- Fee-based income in 3Q19 amounted to IDR. 249 million up 1.8% YOY, the fastest growth quarter in 2019, supported by many new loans approved in 3Q19, which led to an increase in the provision of credit received.
- Until the end of this year, we expect fee-based revenue growth will remain in the range of 1.8-2%.
No Significant NPL Increase
- Commercial NPLs grew 1.7% YoY due to several projects related to the government (infrastructure) which were affected by the 2019 general election.
- After the completion of the general election, it can be seen that commercial NPLs have improved from 6.0% in 2Q19 to 5.80% in 3Q19.
- Until the end of the year, we don’t see significant potential for commercial NPLs to increase, and expect them to remain in the range of 5.8-6.2%.
Valuation: 17% Upside, Hold.
- Based on our DDM Valuation, we have a target price within one year of IDR 1840. or trading at 1.3x PBV which gives 17% potential upside, Hold.