BMRI
Contact our analyst Lingga
36% upside. BUY
11 June, 2020
Price Rp4,910
Target price Rp6,690
Net Interest Margin down
Net Interest Margin fell to 5.40% mainly driven by loan restructuring. In 1Q BMRI has approved a total of IDR 99trn (10.9% of loans) worth of loan restructuring, and 13.6% of loans are still in the pipeline as of June 5, 2020. We estimate the Net Interest Margin will be around 4.87% in 2020.
Loan growth still strong
In 1Q20, Loans grew 14.20% YoY, but fell by 0.5% QoQ. Growth was driven by Corporate 9.9% YoY, Commercial 8.7% YoY. MSME loans reached Rp 89.2 trillion in March 2020, growing by 6.90% YoY. Growth is still quite good because Covid-19 has not yet had a significant impact, but we have reduced our forecast for loan growth from 10% to 7-8% in 2020.
BMRIs focus, maintain liquidity, restructure loans
BMRI is focussing on maintaining liquidity with the issuance of IDR 1 trillion local bonds and US $ 500 million global bonds, plus increasing low-cost funds. As of May 29, 2020, BMRI has restructured more than 323 thousand debtors. Of the total debtors restructured, 72% are from SME and Micro debtors with a total value of Rp. 25.6 Trillion
Valuation: 36% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 6690,or trading at 1.0x PBV which gives 36% potential upside, Buy.
Net Interest Margin fell to 5.40% mainly driven by loan restructuring. In 1Q BMRI has approved a total of IDR 99trn (10.9% of loans) worth of loan restructuring, and 13.6% of loans are still in the pipeline as of June 5, 2020. We estimate the Net Interest Margin will be around 4.87% in 2020.
Loan growth still strong
In 1Q20, Loans grew 14.20% YoY, but fell by 0.5% QoQ. Growth was driven by Corporate 9.9% YoY, Commercial 8.7% YoY. MSME loans reached Rp 89.2 trillion in March 2020, growing by 6.90% YoY. Growth is still quite good because Covid-19 has not yet had a significant impact, but we have reduced our forecast for loan growth from 10% to 7-8% in 2020.
BMRIs focus, maintain liquidity, restructure loans
BMRI is focussing on maintaining liquidity with the issuance of IDR 1 trillion local bonds and US $ 500 million global bonds, plus increasing low-cost funds. As of May 29, 2020, BMRI has restructured more than 323 thousand debtors. Of the total debtors restructured, 72% are from SME and Micro debtors with a total value of Rp. 25.6 Trillion
Valuation: 36% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 6690,or trading at 1.0x PBV which gives 36% potential upside, Buy.
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