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BMRI
Contact our analyst achmadi

30% UPSIDE, Buy
May 16th, 2023
Price Rp 4,990

Target price Rp 6,510

25% Profit Growth
In the first quarter of 2023, Bank Mandiri (BMRI) recorded a significant increase in net profit, with a figure of IDR 12.56 trillion. This represents a growth of 25.21% year-on-year, compared to IDR 10.03 trillion in the previous year. Furthermore, the net interest income of the bank grew by 12.36%, although this was slower growth than last year. Despite the slight decrease in net interest income growth, the NIM ratio was still maintained, and even grew by 9 basis points year-on-year. We forecast BMRI will continue to grow its net profit, reaching IDR 57.17 trillion in 2023, which represents a year-on-year increase of 38.84%. The NIM ratio is expected to remain within the bank's guidance at 5.30%.

Solid Loan and Deposit Growth
As of March 2023, Bank Mandiri reported robust loan growth of 12.36% YoY, amounting to IDR 1,205 trillion. Overall, Commercial loans had the fastest growth, increasing by 17.75% YoY and within that, Energy and Water loans was the largest contributor to growth with a significant uptick of 178%. Additionally, other loans, including Micro, SME and Consumer, registered growth rates of 12.72%, 11.61%, and 5.15%, respectively. Customer Deposits had a quarterly decline of -6.69%, but still grew on an annual basis, by 9.62%, with Current Accounts growing by 23.19%, Saving Accounts by 9.71%, and Time Deposit decreasing by -4.61%. This improvement in current and saving accounts led to an increase in the CASA ratio, which surged by 3.90%, reaching 74.20%. We anticipate BMRI will continue expanding its consolidated loan portfolio by 13.97% YoY, leading to a higher LDR ratio at 80.37%. Additionally, we predict that the CASA ratio will surge to the level of 77.80% by December 31st, 2023.

Asset Quality Improved
As of March 2023, BMRI improved its consolidated gross NPL ratio, which declined by -89 bps YoY to 1.77%, and for bank only, the ratio decreased by -15 bps YoY to 1.70%. Corporate banking now has the healthiest NPL ratio at 0.85% with a decrease of 37 bps YoY. SME, Consumer, Micro, Commercial NPLs are 0.93%, 1.15%, 1.92%, and 3.86%. The overall NPL coverage ratio also increasing 55.9% to 303%. We predict BMRI will continue improving its asset quality and reduce the consolidated NPL ratio in 2023 to 1.65% and 1.55% for the bank only.
 
Valuation: 30% Upside, Buy
Based on our Multi-Stage DDM Valuation, we have determined a target price of IDR 6,510 within one year, which implies a trading multiple of 3.3x PBV and offers a potential upside of 30%. Therefore, we recommend a "Buy".


Download full report here
Previously
​BMRI Feb2023
​BMRI Nov2022
​BMRI Aug2022
​BMRI Mar2022
​​BMRI Nov2021
​BMRI Aug2021
​​BMRI May2021
​BMRI Feb 2021
​BMRI Nov 2020
​BMRI JUN2020
​BMRI Jan2020
BMRI Nov2019
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