BMRI
Contact our analyst achmadi
24% UPSIDE, Buy
20th February, 2023
Price Rp10,275
Target price Rp12,740
46.89% Profit Growth
In FY22, BMRI recorded a net profit of IDR 41.17 trillion, up significantly by 46.89% YoY from IDR 28.03 trillion the previous year. The growth was supported by higher net interest and sharia income, which grew by +20.31% YoY. The growth was mostly contributed by income from loans and government bonds, which accounted for 76.29% of the total. They grew by 11.70% and 39.10% YoY, respectively. We estimate that BMRI will grow its net profit by +34.07% from IDR 41.17 trillion in FY22 to IDR 55.20 trillion in FY23.
Solid Loan growth
As of December 2022, BMRI recorded solid consolidated loan growth of +14.48% YoY. The highest growth was from Micro Loans, which grew by 15.31% YoY, with KUR experiencing the highest growth rate among micro loans, growing by 16.5% YoY. Other segments, such as Commercial, SME, Corporate, and Consumer, also experienced growth, with rates of 12.95%, 11.96%, 11.86%, and 11.62%, respectively. Corporate credit remained the major contributor to BMRI's loan portfolio, accounting for 34.4% of total loans. We predict that consolidated total gross loans will grow by +11.95% in FY23, with bank-only loans growing at a slightly faster rate of +12.63% YoY. Non-bank loans are also expected to grow, though at a lower rate of +9.61% YoY.
Asset Quality Improved
As of December 2022, BMRI improved its consolidated gross NPL ratio, which declined by -80 bps YoY to 1.92%, and for bank only, the ratio decreased by -93 bps YoY to 1.88%. Of the five segments served by BMRI, only one, SME lending, saw an increase in its NPL ratio from 0.62% in FY21 to 0.90% in FY22, although it was still one of the smallest NPLs among the other segments. The NPL ratios for Corporate, Micro, Consumer, and Commercial loans were 0.90%, 1.04%, 1.89%, and 4.92%, respectively. We forecast that BMRI's consolidated gross NPL ratio will decline again to 1.66% in FY23 from 1.92% in FY22, and for bank-only loans, it will decrease again to 1.55% in FY23 from 1.88% in FY21.
Valuation: 24% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 12,740 or trading at 2.3x PBV which gives 24% potential upside, Buy
In FY22, BMRI recorded a net profit of IDR 41.17 trillion, up significantly by 46.89% YoY from IDR 28.03 trillion the previous year. The growth was supported by higher net interest and sharia income, which grew by +20.31% YoY. The growth was mostly contributed by income from loans and government bonds, which accounted for 76.29% of the total. They grew by 11.70% and 39.10% YoY, respectively. We estimate that BMRI will grow its net profit by +34.07% from IDR 41.17 trillion in FY22 to IDR 55.20 trillion in FY23.
Solid Loan growth
As of December 2022, BMRI recorded solid consolidated loan growth of +14.48% YoY. The highest growth was from Micro Loans, which grew by 15.31% YoY, with KUR experiencing the highest growth rate among micro loans, growing by 16.5% YoY. Other segments, such as Commercial, SME, Corporate, and Consumer, also experienced growth, with rates of 12.95%, 11.96%, 11.86%, and 11.62%, respectively. Corporate credit remained the major contributor to BMRI's loan portfolio, accounting for 34.4% of total loans. We predict that consolidated total gross loans will grow by +11.95% in FY23, with bank-only loans growing at a slightly faster rate of +12.63% YoY. Non-bank loans are also expected to grow, though at a lower rate of +9.61% YoY.
Asset Quality Improved
As of December 2022, BMRI improved its consolidated gross NPL ratio, which declined by -80 bps YoY to 1.92%, and for bank only, the ratio decreased by -93 bps YoY to 1.88%. Of the five segments served by BMRI, only one, SME lending, saw an increase in its NPL ratio from 0.62% in FY21 to 0.90% in FY22, although it was still one of the smallest NPLs among the other segments. The NPL ratios for Corporate, Micro, Consumer, and Commercial loans were 0.90%, 1.04%, 1.89%, and 4.92%, respectively. We forecast that BMRI's consolidated gross NPL ratio will decline again to 1.66% in FY23 from 1.92% in FY22, and for bank-only loans, it will decrease again to 1.55% in FY23 from 1.88% in FY21.
Valuation: 24% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 12,740 or trading at 2.3x PBV which gives 24% potential upside, Buy
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