BJBR
Contact our analyst achmadi
75% upside, Buy
2nd January 2023
Price Rp1350
Target price Rp2,360
Net Income grew +26.20%
In 9M22, BJBR recorded net income of IDR 1.78 trillion, up 26.20% YoY from IDR 1.41 trillion in 9M21. Growth was supported by well-managed interest expenses which decreased by -9.85%. Another driver was solid revenue growth from non-loan related fees and commissions, which grew by almost +30%. We project that BJBR will continue to grow its Net Income by +19.41% YoY in FY22 to IDR 2.43 trillion from IDR 2.03 trillion in FY21.
Strong Growth from Commercial Loans and CASA
As of 9M22, BJBR had consolidated loan growth of almost +12% YoY. The growth was driven by Commercial Loans, which grew almost +30% YoY. Other segments increased too. Mortgage, Micro, and Consumer loans grew by 16.92%, 9.69%, and 5.32%. CASA also grew by +16.67% and the ratio increased by +665 bps to 47.91% in 9M22. We forecast Consolidated Total Gross Loans will grow by +11.43% in 2022 with Commercial loans growing fastest at +28.43% compared to the previous year.
Asset Quality Improved
BJBR improved its asset quality with the gross NPL (bank-only) ratio declining from 1.26% in 9M21 to 1.07% in 9M22. Of the four segments that are served by BJBR, only one segment, Consumer lending had a NPL ratio increase from 0.20% in 9M21 to 0.25% in 9M22. Mortgage loans had the largest improvements with the NPL ratio declining from 3.67% to 2.67%. The NPL ratios of Commercial and Micro loans were 2.62% and 1.76% respectively. The asset quality improvement was also seen by a decrease in the Special Mention Loans (bank-only) Ratio which declined -70 bps to 2.10%. We predict BJBR’s bank-only gross NPLs and SMLs will decrease to 1.02% and 2.06% respectively.
Valuation: 75% Upside potential, Buy.
Based on our DDM Valuation, we have a target price of IDR 2,360 within a year, or trading at 1,9x PBV and 75% potential upside, Buy.
In 9M22, BJBR recorded net income of IDR 1.78 trillion, up 26.20% YoY from IDR 1.41 trillion in 9M21. Growth was supported by well-managed interest expenses which decreased by -9.85%. Another driver was solid revenue growth from non-loan related fees and commissions, which grew by almost +30%. We project that BJBR will continue to grow its Net Income by +19.41% YoY in FY22 to IDR 2.43 trillion from IDR 2.03 trillion in FY21.
Strong Growth from Commercial Loans and CASA
As of 9M22, BJBR had consolidated loan growth of almost +12% YoY. The growth was driven by Commercial Loans, which grew almost +30% YoY. Other segments increased too. Mortgage, Micro, and Consumer loans grew by 16.92%, 9.69%, and 5.32%. CASA also grew by +16.67% and the ratio increased by +665 bps to 47.91% in 9M22. We forecast Consolidated Total Gross Loans will grow by +11.43% in 2022 with Commercial loans growing fastest at +28.43% compared to the previous year.
Asset Quality Improved
BJBR improved its asset quality with the gross NPL (bank-only) ratio declining from 1.26% in 9M21 to 1.07% in 9M22. Of the four segments that are served by BJBR, only one segment, Consumer lending had a NPL ratio increase from 0.20% in 9M21 to 0.25% in 9M22. Mortgage loans had the largest improvements with the NPL ratio declining from 3.67% to 2.67%. The NPL ratios of Commercial and Micro loans were 2.62% and 1.76% respectively. The asset quality improvement was also seen by a decrease in the Special Mention Loans (bank-only) Ratio which declined -70 bps to 2.10%. We predict BJBR’s bank-only gross NPLs and SMLs will decrease to 1.02% and 2.06% respectively.
Valuation: 75% Upside potential, Buy.
Based on our DDM Valuation, we have a target price of IDR 2,360 within a year, or trading at 1,9x PBV and 75% potential upside, Buy.
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