BMRI
Contact our analyst achmadi
36% UPSIDE, Buy
16th August, 2023
Price Rp 5,800
Target price Rp 7,870
Strong Profit Growth
In Q2 2023, Bank Mandiri (BMRI) reported impressive net profit of IDR 25.23 trillion, a 24.85% YoY increase from the previous year's IDR 20.21 trillion. This growth was primarily fueled by a 21.26% YoY rise in interest income, leading to a 19 basis points YoY increase in NIM to 5.56%. Recoveries from written-off assets also contributed, with a 43.29% YoY growth. We anticipate 35.89% YoY growth in FY23, with profit reaching IDR 55.95 trillion.
Steady Loan and Deposit Growth
As of June 2023, Bank Mandiri reported robust 11.75% YoY loan growth to IDR 1,273 trillion. Notably, commercial loans led with 19.17% YoY growth, driven by Energy and Water loans surging by 200%. Other loan segments including Consumer, SME, Micro, and Corporate loans grew at rates of 11.66%, 11.56%, 11.31%, and 5.97% respectively. Customer deposits grew by 8.47%, primarily from a 21.17% expansion in Current Account, while Savings Account grew by 5.80%, and Time Deposit decreased by 1.43% YoY. This led to a 260 basis points YoY increase in the CASA ratio to 73.40%, though it remained 80 basis points lower than the previous quarter. We anticipate a 13.97% YoY expansion of the loan portfolio and 11.66% growth in Customer Deposits by December 31st, 2023.
Improved Asset Quality
As of June 2023, BMRI consolidated gross NPL ratio, decreased by -78 bps YoY to 1.64%. For the bank only, the ratio decreased by -94 bps YoY to 1.53%. Corporate banking boasted the healthiest NPL ratio at 0.83%, down by 21 bps. SME, Micro, Consumer, Commercial NPLs stood at 0.98%, 1.31%, 2.13%, and 2.93% respectively. The overall NPL coverage ratio increased by 51% to 304%. We project continued asset quality improvement, reducing the consolidated NPL ratio to 1.65% and 1.55% for the bank only in 2023.
Valuation: 36% Upside, Recommendation to Buy.
Our Multi-Stage DDM Valuation indicates a target price of IDR 7,870 within a year, implying a trading multiple of 3.9x PBV and offering a potential 36% upside. Consequently, we recommend a "Buy."
In Q2 2023, Bank Mandiri (BMRI) reported impressive net profit of IDR 25.23 trillion, a 24.85% YoY increase from the previous year's IDR 20.21 trillion. This growth was primarily fueled by a 21.26% YoY rise in interest income, leading to a 19 basis points YoY increase in NIM to 5.56%. Recoveries from written-off assets also contributed, with a 43.29% YoY growth. We anticipate 35.89% YoY growth in FY23, with profit reaching IDR 55.95 trillion.
Steady Loan and Deposit Growth
As of June 2023, Bank Mandiri reported robust 11.75% YoY loan growth to IDR 1,273 trillion. Notably, commercial loans led with 19.17% YoY growth, driven by Energy and Water loans surging by 200%. Other loan segments including Consumer, SME, Micro, and Corporate loans grew at rates of 11.66%, 11.56%, 11.31%, and 5.97% respectively. Customer deposits grew by 8.47%, primarily from a 21.17% expansion in Current Account, while Savings Account grew by 5.80%, and Time Deposit decreased by 1.43% YoY. This led to a 260 basis points YoY increase in the CASA ratio to 73.40%, though it remained 80 basis points lower than the previous quarter. We anticipate a 13.97% YoY expansion of the loan portfolio and 11.66% growth in Customer Deposits by December 31st, 2023.
Improved Asset Quality
As of June 2023, BMRI consolidated gross NPL ratio, decreased by -78 bps YoY to 1.64%. For the bank only, the ratio decreased by -94 bps YoY to 1.53%. Corporate banking boasted the healthiest NPL ratio at 0.83%, down by 21 bps. SME, Micro, Consumer, Commercial NPLs stood at 0.98%, 1.31%, 2.13%, and 2.93% respectively. The overall NPL coverage ratio increased by 51% to 304%. We project continued asset quality improvement, reducing the consolidated NPL ratio to 1.65% and 1.55% for the bank only in 2023.
Valuation: 36% Upside, Recommendation to Buy.
Our Multi-Stage DDM Valuation indicates a target price of IDR 7,870 within a year, implying a trading multiple of 3.9x PBV and offering a potential 36% upside. Consequently, we recommend a "Buy."
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