BMRI
Contact our analyst Lingga
9% upside. Hold
4th February, 2021
Price Rp6500
Target price Rp7090
Net profit drop
BMRI posted a FY2020 net profit of IDR 17.2 trillion, down 37.7% YoY. Net Interest Income increased by 4.9% YoY, PPOP fell 5.1% even though it grew quite significantly on a quarterly basis, by 9%. But the increase in provision costs was quite significant, IDR 23 trillion or 36.4% YoY, which held back the increase in net income. BMRI is focusing on debt restructuring,
Loan growth single digit
Loan growth was 0.1% QoQ and 7.1% YoY. Loan growth increased for all segments except for the UMKM segment, which was down 6.1% YoY. BMRI continues to be selective in providing loans to certain sectors such as FMCG, telecommunications, and health-related sectors and instead, is looking to optimize the growth potential of micro and MSMEs with digital innovations. We still estimate loan growth to remain in the range of 7-8% in 2021F taking into account the uncertainty of the realization of vaccination programs and economic recovery.
Credit Restructuring and Asset Quality
The credit restructuring in FY 2020 has reached a total of IDR 123.4 trillion or 16.2% of total loans (Bank Only) consisting of Corporate IDR 50.7 trillion, Commercial IDR 13.3 trillion, Retail IDR 59.5 trillion. 11% of the restructured loans are high-risk profile, 25% are intermediate risk. Asset quality in terms of non-performing loans decreased 24Bps to 3.1%, The NPL Coverage Ratio rose to 229.1%.
Valuation: 9% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 7,090,or trading at 1,6x PBV which gives 9% potential upside, Hold.
BMRI posted a FY2020 net profit of IDR 17.2 trillion, down 37.7% YoY. Net Interest Income increased by 4.9% YoY, PPOP fell 5.1% even though it grew quite significantly on a quarterly basis, by 9%. But the increase in provision costs was quite significant, IDR 23 trillion or 36.4% YoY, which held back the increase in net income. BMRI is focusing on debt restructuring,
Loan growth single digit
Loan growth was 0.1% QoQ and 7.1% YoY. Loan growth increased for all segments except for the UMKM segment, which was down 6.1% YoY. BMRI continues to be selective in providing loans to certain sectors such as FMCG, telecommunications, and health-related sectors and instead, is looking to optimize the growth potential of micro and MSMEs with digital innovations. We still estimate loan growth to remain in the range of 7-8% in 2021F taking into account the uncertainty of the realization of vaccination programs and economic recovery.
Credit Restructuring and Asset Quality
The credit restructuring in FY 2020 has reached a total of IDR 123.4 trillion or 16.2% of total loans (Bank Only) consisting of Corporate IDR 50.7 trillion, Commercial IDR 13.3 trillion, Retail IDR 59.5 trillion. 11% of the restructured loans are high-risk profile, 25% are intermediate risk. Asset quality in terms of non-performing loans decreased 24Bps to 3.1%, The NPL Coverage Ratio rose to 229.1%.
Valuation: 9% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 7,090,or trading at 1,6x PBV which gives 9% potential upside, Hold.
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