BNGA
Contact our analyst Lingga
22% upside. BUY.
31th August 2021
Price Rp 995
Target price Rp1,210
Lower Provision
In 2Q21, BNGA recorded a net profit of IDR 1.1 trillion, up 14.1% from IDR 0.9 trillion in 1Q21. This growth was supported by a 28.4% reduction in provisioning costs thanks to their front-loading strategy in 1Q21. PPoP rose 4.6% on the back of non-interest income mainly from non-core items such as marketable securities gains and loan recovery income.
Loan down, deposits up
Loans were unchanged quarterly, but decreased 6.8% YoY. The consumer segment was up 5% YoY, Corporate was down -14% YoY, Commercial was down -14.3% YoY. Third party fund growth was 7% YoY driven by low-cost funds with current accounts up 8.2% and saving accounts up 10.5% so that the cost of funds also decreased to 2.4% from 3% in 1Q21.
BNGA low cost funding Focus
BNGA is focusing on increasing low-cost funding and non-interest income, as well as their digital transactions through Octo Mobile. They are also digitizing the back end (Octo smart and Octo RM Bench).
Valuation: 22% Upside, BUY.
Based on our DDM Valuation, we have a target price within one year of IDR 1,210 or trading at 0.6x PBV which gives 22% potential upside, Buy.
In 2Q21, BNGA recorded a net profit of IDR 1.1 trillion, up 14.1% from IDR 0.9 trillion in 1Q21. This growth was supported by a 28.4% reduction in provisioning costs thanks to their front-loading strategy in 1Q21. PPoP rose 4.6% on the back of non-interest income mainly from non-core items such as marketable securities gains and loan recovery income.
Loan down, deposits up
Loans were unchanged quarterly, but decreased 6.8% YoY. The consumer segment was up 5% YoY, Corporate was down -14% YoY, Commercial was down -14.3% YoY. Third party fund growth was 7% YoY driven by low-cost funds with current accounts up 8.2% and saving accounts up 10.5% so that the cost of funds also decreased to 2.4% from 3% in 1Q21.
BNGA low cost funding Focus
BNGA is focusing on increasing low-cost funding and non-interest income, as well as their digital transactions through Octo Mobile. They are also digitizing the back end (Octo smart and Octo RM Bench).
Valuation: 22% Upside, BUY.
Based on our DDM Valuation, we have a target price within one year of IDR 1,210 or trading at 0.6x PBV which gives 22% potential upside, Buy.
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