BMRI
Contact our analyst Lingga
22% UPSIDE, Buy
2nd March, 2022
Price Rp7,650
Target price Rp9,360
Higher Net Interest Income
BMRI recorded a net profit of IDR 28 trillion up 66.83% supported by higher Net Interest Income +16.86% YoY and Non-Interest Income +9% YoY, well managed operating expenses +10.35%, and lower provision expenses which decreased -21.37% YoY. NIM was stable at 5.09% despite significantly lower asset yields particularly corporate loan yields.
Strong Loan growth
BMRI recorded strong loan growth of 8.86% YoY in 2021. Corporate loans had the highest contributions at 35.2% of total loans. Commercial loans grew +9.7%, micro +9.3%, and SME 8.7%. The bank targets loan growth of more than 8% which matches with our expectation with a focus on higher-yield through commercial, SME, and Consumer loans.
Better Asset Quality and Loan Restructuring
Non-Performing loans decreased to 2.72%. The amount of outstanding restructured loans is down to IDR 69.7 trillion in 4Q21 from IDR 90.1 trillion in the previous quarter. It is worth noting that around 53% of total restructured loans are low-risk, 33% medium risk, and 14% high-risk which indicates that they have risk to be downgraded to NPL after the restructuring period is over.
Digital customers jump 51%
Mandiri launched digital platforms Livin 2.0 for retail and Kopra for wholesale customers back in October 2021. Livin users grew by 51% to 9.6 million. BMRI's Kopra has had IDR 13,545 trillion of wholesale transactions since its inception with the aim to penetrate more than 50% of Mandiri’s wholesale customers via extensive partnerships with top players in the digital ecosystem like Gojek, Tokopedia, Traveloka, Ovo, Grab, Shopee, Blibli.
Valuation: 22% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 9,360, or trading at 1,7x PBV which gives 22% potential upside, Buy.
BMRI recorded a net profit of IDR 28 trillion up 66.83% supported by higher Net Interest Income +16.86% YoY and Non-Interest Income +9% YoY, well managed operating expenses +10.35%, and lower provision expenses which decreased -21.37% YoY. NIM was stable at 5.09% despite significantly lower asset yields particularly corporate loan yields.
Strong Loan growth
BMRI recorded strong loan growth of 8.86% YoY in 2021. Corporate loans had the highest contributions at 35.2% of total loans. Commercial loans grew +9.7%, micro +9.3%, and SME 8.7%. The bank targets loan growth of more than 8% which matches with our expectation with a focus on higher-yield through commercial, SME, and Consumer loans.
Better Asset Quality and Loan Restructuring
Non-Performing loans decreased to 2.72%. The amount of outstanding restructured loans is down to IDR 69.7 trillion in 4Q21 from IDR 90.1 trillion in the previous quarter. It is worth noting that around 53% of total restructured loans are low-risk, 33% medium risk, and 14% high-risk which indicates that they have risk to be downgraded to NPL after the restructuring period is over.
Digital customers jump 51%
Mandiri launched digital platforms Livin 2.0 for retail and Kopra for wholesale customers back in October 2021. Livin users grew by 51% to 9.6 million. BMRI's Kopra has had IDR 13,545 trillion of wholesale transactions since its inception with the aim to penetrate more than 50% of Mandiri’s wholesale customers via extensive partnerships with top players in the digital ecosystem like Gojek, Tokopedia, Traveloka, Ovo, Grab, Shopee, Blibli.
Valuation: 22% Upside, Buy.
Based on our DDM Valuation, we have a target price within one year of IDR 9,360, or trading at 1,7x PBV which gives 22% potential upside, Buy.
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