BNGA
Contact our analyst Achmadi
16% upside. Hold.
April 4th, 2023
Price Rp 1,290
Target price Rp1,490
Net Profit increased by +23%
In 2022, BNGA experienced a significant increase in net profit, which grew by 22.96% YoY, from IDR 4.10 trillion to IDR 5.04 trillion. This growth was mainly driven by non-interest income, which had a YoY increase of 20.34%. The highest contributor to growth was the net gains from financial instruments measured at FVTPL, which showed an impressive YoY growth of 142.27% with the main contributor of these gains being from derivatives. On the other hand, interest income did not show significant growth, only growing by 1.33%. However, income from current accounts with Bank Indonesia and other banks showed a massive YoY increase of 127.07%. This resulted in a 17 bps decrease in the net interest margin (NIM) ratio to 4.69%. Looking ahead to 2023, we forecast BNGA will continue to experience growth in net profit, with a predicted increase of 33.93%, from IDR 5.04 trillion in FY22 to IDR 6.75 trillion in FY23. Additionally, we anticipate that the NIM ratio will improve to a level of 4.83%.
Solid Loan and CASA Growth
As of December 2022, BNGA saw strong growth in its consolidated loan portfolio, which increased by 9.44% compared to the previous year. Corporate loans grew the most, increasing by 12.96% YoY due to a focus on top-tier corporations, multinationals, and state-owned enterprises. Commercial loans decreased slightly by 0.63%, as the bank focused on smaller commercial loans with better returns. Consumer and EBB loans increased by 11.76% and 9.18%, respectively. The bank's CASA ratio grew to 63.57%, in line with its goal of acquiring low-cost funding through CASA deposits to disburse loans. Based on these trends, BNGA is projected to continue growing its consolidated loan portfolio by 8.88% and to increase the CASA ratio to 66.19%, in FY22.
Improvement in Asset Quality
In December 2022, BNGA achieved an improvement in its Non-Performing Loan (NPL) ratio, which decreased by 70 basis points to 2.80%. This improvement was driven by the recovery in national macroeconomic conditions and the bank's improved collection process in 2022. The top sectors causing NPLs were Trading, Restaurants, Hotels, and Administration, making up almost 40% of the total, followed by Manufacturing and Property. Looking ahead, we project that BNGA will continue to improve its asset quality, with its NPL ratio decreasing further to 2.51% in 2023.
Valuation: 16% Upside, HOLD.
Based on our DDM Valuation, we have a target price within one year of IDR 1,490 or trading at 0.7x PBV. With 16% potential upside, we recommend HOLD.
In 2022, BNGA experienced a significant increase in net profit, which grew by 22.96% YoY, from IDR 4.10 trillion to IDR 5.04 trillion. This growth was mainly driven by non-interest income, which had a YoY increase of 20.34%. The highest contributor to growth was the net gains from financial instruments measured at FVTPL, which showed an impressive YoY growth of 142.27% with the main contributor of these gains being from derivatives. On the other hand, interest income did not show significant growth, only growing by 1.33%. However, income from current accounts with Bank Indonesia and other banks showed a massive YoY increase of 127.07%. This resulted in a 17 bps decrease in the net interest margin (NIM) ratio to 4.69%. Looking ahead to 2023, we forecast BNGA will continue to experience growth in net profit, with a predicted increase of 33.93%, from IDR 5.04 trillion in FY22 to IDR 6.75 trillion in FY23. Additionally, we anticipate that the NIM ratio will improve to a level of 4.83%.
Solid Loan and CASA Growth
As of December 2022, BNGA saw strong growth in its consolidated loan portfolio, which increased by 9.44% compared to the previous year. Corporate loans grew the most, increasing by 12.96% YoY due to a focus on top-tier corporations, multinationals, and state-owned enterprises. Commercial loans decreased slightly by 0.63%, as the bank focused on smaller commercial loans with better returns. Consumer and EBB loans increased by 11.76% and 9.18%, respectively. The bank's CASA ratio grew to 63.57%, in line with its goal of acquiring low-cost funding through CASA deposits to disburse loans. Based on these trends, BNGA is projected to continue growing its consolidated loan portfolio by 8.88% and to increase the CASA ratio to 66.19%, in FY22.
Improvement in Asset Quality
In December 2022, BNGA achieved an improvement in its Non-Performing Loan (NPL) ratio, which decreased by 70 basis points to 2.80%. This improvement was driven by the recovery in national macroeconomic conditions and the bank's improved collection process in 2022. The top sectors causing NPLs were Trading, Restaurants, Hotels, and Administration, making up almost 40% of the total, followed by Manufacturing and Property. Looking ahead, we project that BNGA will continue to improve its asset quality, with its NPL ratio decreasing further to 2.51% in 2023.
Valuation: 16% Upside, HOLD.
Based on our DDM Valuation, we have a target price within one year of IDR 1,490 or trading at 0.7x PBV. With 16% potential upside, we recommend HOLD.
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