BNGA
Contact our analyst Achmadi
21% upside. Buy.
July 5th, 2023
Price Rp 1605
Target price Rp1,950
Net Profit up +32%
BNGA’s Q1 2023 net profit grew by 32.41% YoY, reaching IDR 1.58 trillion from IDR 1.19 trillion last year. This growth was mainly driven by a 16.91% YoY increase in interest income. Additionally, the NIM ratio increased by 25 bps YoY to 4.71%. Non-Operational Income (net) also surged by almost 1,265% YoY. Looking ahead, we project a further 20.06% growth in BNGA's net income to IDR 6.053 trillion by December 2023.
Solid Loan Growth
BNGA has shown solid loan growth, with a consolidated gross loan increase of 10.06% as of March 2023. All four segments experienced growth, with Corporate Banking leading at 16.17% YoY. Consumer, EBB, and Commercial Banking also grew by 9.37%, 6.59%, and 0.61% respectively. Based on these trends, we predict an additional 8.39% expansion in BNGA's consolidated loan portfolio for FY23.
Better Asset Quality
Asset quality has improved for BNGA, as the consolidated NPL ratio decreased from 3.60% to 2.58% as of March 2023. The SML ratio also decreased to 5.40% from 6.50% in Q1-22. This improvement resulted in a 34.20% decrease in provision expenses, while the loan loss coverage increased by 42.70% YoY to 253.5%. Looking ahead, we predict further improvement in BNGA's consolidated NPL, with a decrease of 35 bps YoY to 2.45% and a 16.49% reduction in provision expenses for FY23.
ESG growth
BNGA is committed to ESG integration and SDG support. The bank actively incorporates environmental, social, and governance aspects into its business activities, and its Sustainable Finance portfolio grew by 15.30% YoY in March 2023, and was 26% of CIMB's portfolio.
Valuation: 21% Upside, Buy.
Based on our DDM Valuation, we recommend buying BNGA stock, as we have a target price of IDR 1,950 within one year or a valuation of 1.0x PBV. With a potential upside of 21%, we recommend to BUY.
BNGA’s Q1 2023 net profit grew by 32.41% YoY, reaching IDR 1.58 trillion from IDR 1.19 trillion last year. This growth was mainly driven by a 16.91% YoY increase in interest income. Additionally, the NIM ratio increased by 25 bps YoY to 4.71%. Non-Operational Income (net) also surged by almost 1,265% YoY. Looking ahead, we project a further 20.06% growth in BNGA's net income to IDR 6.053 trillion by December 2023.
Solid Loan Growth
BNGA has shown solid loan growth, with a consolidated gross loan increase of 10.06% as of March 2023. All four segments experienced growth, with Corporate Banking leading at 16.17% YoY. Consumer, EBB, and Commercial Banking also grew by 9.37%, 6.59%, and 0.61% respectively. Based on these trends, we predict an additional 8.39% expansion in BNGA's consolidated loan portfolio for FY23.
Better Asset Quality
Asset quality has improved for BNGA, as the consolidated NPL ratio decreased from 3.60% to 2.58% as of March 2023. The SML ratio also decreased to 5.40% from 6.50% in Q1-22. This improvement resulted in a 34.20% decrease in provision expenses, while the loan loss coverage increased by 42.70% YoY to 253.5%. Looking ahead, we predict further improvement in BNGA's consolidated NPL, with a decrease of 35 bps YoY to 2.45% and a 16.49% reduction in provision expenses for FY23.
ESG growth
BNGA is committed to ESG integration and SDG support. The bank actively incorporates environmental, social, and governance aspects into its business activities, and its Sustainable Finance portfolio grew by 15.30% YoY in March 2023, and was 26% of CIMB's portfolio.
Valuation: 21% Upside, Buy.
Based on our DDM Valuation, we recommend buying BNGA stock, as we have a target price of IDR 1,950 within one year or a valuation of 1.0x PBV. With a potential upside of 21%, we recommend to BUY.
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