BJTM
Contact our analyst Achmadi
18% upside. HOLD.
1st December 2023
Price Rp 625
Target price Rp 740
Negative Net Income Growth
In 9M-2023, BJTM was still able to generate a profit, but it experienced a decline in net income growth by -9.02% YoY, reaching IDR 1.095 trillion. This decline was caused by a significant increase in interest expenses, which were 19.67% higher than in 9M-22. The interest income also only grew by 3.80%. Despite these conditions, BJTM’s Net Interest Margin (NIM) ratio remained stable quarterly at 5.38%, which is also 21 basis points higher than in 9M-22. We forecast that BJTM will be able to generate more profit for the FY23 period, reaching IDR 1.519 trillion, although this is still lower by -1.53% compared to FY22.
Tremendous Loan Growth
As of September 2023, BJTM’s loan portfolio grew by an impressive 12.61% YoY. The highest growth came from the Commercial & SME segment, which increased by 25.43% annually, while the consumer segment grew by 4.75%. From an economic sector perspective, the highest portion came from Wholesale and Retail Trade, accounting for 32.73%. This also led to an increase in the Loan-to-Deposit Ratio (LDR) by 6.09% YoY, reaching a level of 61.49%. We forecast that BJTM will continue to expand its loan portfolio with annual growth of 14.88% by December 2023.
Better NPL Ratio
BJTM experienced a significant improvement in its NPL ratio, which declined by 97 basis points (bps) to reach 2.75%. All segments performed well, with the Consumer segment being the healthiest, as its NPL stood at 1.00%, a decrease of -0.2%. The NPL ratio for the Commercial & SME segment also decreased by 4 bps to 1.74%. The coverage ratio also decreased by 2.69% to 97.20%, attributed to write-offs and the reduction of NPLs. We forecast that BJTM will maintain its asset quality by further lowering its NPL ratio to 2.69%.
Breathtaking Digital Banking Growth
As of September 2023, BJTM's digital innovation, "JConnect," performed impressively. The JConnect Mobile application users experienced a high growth of 30% YoY, reaching 606,239. The transaction amount reached IDR 3.3 trillion, representing a 35% YoY increase. QRIS users also grew by 106% YoY, reaching 111,651, with transactions amounting to IDR 51 billion, reflecting a 137% YoY growth.
KUB Progress
BJTM’s corporate action project, forming KUB (Kelompok Usaha Bank), with Bank NTB Syariah as a member of the group, is still ongoing. As of Q3, BJTM was still conducting due diligence before injecting 15% of the total existing equity, amounting to IDR 100 billion. Currently, BJTM is also preparing for BPD Lampung to become the new member of BJTM’s KUB.
Valuation: 18% Upside, Hold
Based on our DDM Valuation, we have a target price within one year of IDR 740 or trading at 0.91x PBV, which gives a 18% potential upside. We recommend a Hold.
In 9M-2023, BJTM was still able to generate a profit, but it experienced a decline in net income growth by -9.02% YoY, reaching IDR 1.095 trillion. This decline was caused by a significant increase in interest expenses, which were 19.67% higher than in 9M-22. The interest income also only grew by 3.80%. Despite these conditions, BJTM’s Net Interest Margin (NIM) ratio remained stable quarterly at 5.38%, which is also 21 basis points higher than in 9M-22. We forecast that BJTM will be able to generate more profit for the FY23 period, reaching IDR 1.519 trillion, although this is still lower by -1.53% compared to FY22.
Tremendous Loan Growth
As of September 2023, BJTM’s loan portfolio grew by an impressive 12.61% YoY. The highest growth came from the Commercial & SME segment, which increased by 25.43% annually, while the consumer segment grew by 4.75%. From an economic sector perspective, the highest portion came from Wholesale and Retail Trade, accounting for 32.73%. This also led to an increase in the Loan-to-Deposit Ratio (LDR) by 6.09% YoY, reaching a level of 61.49%. We forecast that BJTM will continue to expand its loan portfolio with annual growth of 14.88% by December 2023.
Better NPL Ratio
BJTM experienced a significant improvement in its NPL ratio, which declined by 97 basis points (bps) to reach 2.75%. All segments performed well, with the Consumer segment being the healthiest, as its NPL stood at 1.00%, a decrease of -0.2%. The NPL ratio for the Commercial & SME segment also decreased by 4 bps to 1.74%. The coverage ratio also decreased by 2.69% to 97.20%, attributed to write-offs and the reduction of NPLs. We forecast that BJTM will maintain its asset quality by further lowering its NPL ratio to 2.69%.
Breathtaking Digital Banking Growth
As of September 2023, BJTM's digital innovation, "JConnect," performed impressively. The JConnect Mobile application users experienced a high growth of 30% YoY, reaching 606,239. The transaction amount reached IDR 3.3 trillion, representing a 35% YoY increase. QRIS users also grew by 106% YoY, reaching 111,651, with transactions amounting to IDR 51 billion, reflecting a 137% YoY growth.
KUB Progress
BJTM’s corporate action project, forming KUB (Kelompok Usaha Bank), with Bank NTB Syariah as a member of the group, is still ongoing. As of Q3, BJTM was still conducting due diligence before injecting 15% of the total existing equity, amounting to IDR 100 billion. Currently, BJTM is also preparing for BPD Lampung to become the new member of BJTM’s KUB.
Valuation: 18% Upside, Hold
Based on our DDM Valuation, we have a target price within one year of IDR 740 or trading at 0.91x PBV, which gives a 18% potential upside. We recommend a Hold.
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