BMRI
Contact our analyst Lingga
19% upside. Hold
6th August, 2021
Price Rp5975
Target price Rp7090
Net Profit Increase from BRIS Consolidation
Bank Mandiri (BMRI) reported a net profit of Rp12.5 trillion up 22% YoY. Net Interest Income (22% YoY to Rp35.2tn in 1H21) exceeded expectations helped by a 5.05% NIM expansion up 40bps YoY. Net interest income grew by 21.5% YoY and non-interest income by 16.6% YoY due to an increase in the loan portfolio, mainly driven by the consolidation of BRIS and much lower interest expenses from lower interest rates. There was also a 18.1% YoY increase in PPOP to Rp28,467 billion.
Loan Growth improved
Loan growth remained strong at 16.4% YoY. This growth was supported by SME loans which grew 16.1% YoY, Commercial grew 16% YoY, but the consumer segment slowed by -3.3% YoY. By sector, loans are still dominated by telecommunications, infrastructure and energy & water. BMRI estimates credit growth will slow down slightly because of PPKM. NPL improved to 3.08% from 3.15% in 1Q21. Restructured loans were IDR 0.9 trillion or 10% of the total loan from IDR 1.7 trillion in 2Q21.
Focuses on increasing CASA
Third Party Fund growth was 19.7% YoY mainly due to a significant increase in CASA of 32.49%YoY contributed by a strong deposit franchise and the launch of the Livin digital application. Livin registered users rose 45% YoY to 7.8 million users in June 2021, from 5.4 million in June 2020. Monthly new subscriber receipts reached 45 thousand new users online and 150 thousand new users through branches. This reduction in expensive funds was also helped by a Time Deposit decrease of 1%.
Valuation: 19% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 7,090,or trading at 1,5x PBV which gives 19% potential upside, Hold.
Bank Mandiri (BMRI) reported a net profit of Rp12.5 trillion up 22% YoY. Net Interest Income (22% YoY to Rp35.2tn in 1H21) exceeded expectations helped by a 5.05% NIM expansion up 40bps YoY. Net interest income grew by 21.5% YoY and non-interest income by 16.6% YoY due to an increase in the loan portfolio, mainly driven by the consolidation of BRIS and much lower interest expenses from lower interest rates. There was also a 18.1% YoY increase in PPOP to Rp28,467 billion.
Loan Growth improved
Loan growth remained strong at 16.4% YoY. This growth was supported by SME loans which grew 16.1% YoY, Commercial grew 16% YoY, but the consumer segment slowed by -3.3% YoY. By sector, loans are still dominated by telecommunications, infrastructure and energy & water. BMRI estimates credit growth will slow down slightly because of PPKM. NPL improved to 3.08% from 3.15% in 1Q21. Restructured loans were IDR 0.9 trillion or 10% of the total loan from IDR 1.7 trillion in 2Q21.
Focuses on increasing CASA
Third Party Fund growth was 19.7% YoY mainly due to a significant increase in CASA of 32.49%YoY contributed by a strong deposit franchise and the launch of the Livin digital application. Livin registered users rose 45% YoY to 7.8 million users in June 2021, from 5.4 million in June 2020. Monthly new subscriber receipts reached 45 thousand new users online and 150 thousand new users through branches. This reduction in expensive funds was also helped by a Time Deposit decrease of 1%.
Valuation: 19% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 7,090,or trading at 1,5x PBV which gives 19% potential upside, Hold.
Previously