BNGA
Contact our analyst Achmadi
23% upside. Buy.
June 21st, 2024
Price Rp 1,710
Target price Rp2,110
Small Profitability Growth
In Q1-2024, BNGA recorded a modest growth in Net Income Attributable to the Parent entity, increasing by 6.32% to IDR 1.63 trillion. However, this growth was overshadowed by a substantial 31.17% YoY increase in Interest and Shariah expenses, despite a 9.06% YoY growth in Interest Income and a 19.38% YoY growth in Non-Interest Income. Consequently, BNGA's consolidated NIM ratio increased by 15 basis points (bps) YoY to 3.38%, although it was -13 bps lower than Q4-2023. We forecast that BNGA's Net Income Attributable to the Parent entity will grow by 7.31% YoY in 2024, reaching IDR 6.95 trillion.
Slower Loan Growth
As of March 2024, BNGA's consolidated loan portfolio experienced slower growth of 5.24% compared to the annual Q4-2023 growth of 7.36% YoY. Despite the slower pace, all segments showed healthy growth, with none experiencing a decrease. The Emerging Business Banking segment saw the highest growth at 9.42% YoY, while Corporate Banking had the slowest expansion, increasing by only 2.42% YoY. We forecast that BNGA's consolidated loan portfolio will expand by 4.16% YoY in 2024.
Strong CASA Growth
As of March 2024, BNGA’s CASA position stood at IDR 160.11 trillion, marking a solid growth of 8.89% YoY. This growth was supported by a double-digit increase of 12.29% YoY in current accounts and a 5.77% YoY growth in savings accounts. Consequently, this led to an increase in the CASA Ratio by 25 basis points YoY to 64.55%. We forecast that BNGA’s CASA ratio will reach 64.89%, reflecting a 1.03% YoY increase by December 31st, 2024.
Asset Quality Remains Manageable
As of March 2024, BNGA’s consolidated NPL ratio remained manageable at 2.10%, which was 50 bps better than Q1-2023 despite a 10 bps increase on a quarterly basis. Additionally, the SML NPL ratio decreased to only 4.34% compared to Q1-2023’s 5.28%. We forecast that by December 2024, BNGA’s asset quality will remain healthy, with the gross NPL ratio and SML ratio expected to stand at 1.90% and 3.90%, respectively.
Robust Expansion of OCTO Mobile Transactions and QRIS Utilization
As of Q1-2024, the number of financial transactions via OCTO Mobile was 79.7 million, marking a solid growth of 113.10% compared to Q1-2023, resulting in a transaction value of IDR 98.5 trillion, a significant increase of 42.55% YoY. Additionally, the number of QRIS transactions from OCTO Mobile was 7.6 million.
Valuation: 23% Upside, Buy Recommendation
Our discounted dividend model (DDM) valuation sets a one-year target price at IDR 2,110, a revision from the previous target of IDR 2,610, which equates to a valuation of 0.99x PBV. With a potential upside of 23%, we recommend a BUY.
In Q1-2024, BNGA recorded a modest growth in Net Income Attributable to the Parent entity, increasing by 6.32% to IDR 1.63 trillion. However, this growth was overshadowed by a substantial 31.17% YoY increase in Interest and Shariah expenses, despite a 9.06% YoY growth in Interest Income and a 19.38% YoY growth in Non-Interest Income. Consequently, BNGA's consolidated NIM ratio increased by 15 basis points (bps) YoY to 3.38%, although it was -13 bps lower than Q4-2023. We forecast that BNGA's Net Income Attributable to the Parent entity will grow by 7.31% YoY in 2024, reaching IDR 6.95 trillion.
Slower Loan Growth
As of March 2024, BNGA's consolidated loan portfolio experienced slower growth of 5.24% compared to the annual Q4-2023 growth of 7.36% YoY. Despite the slower pace, all segments showed healthy growth, with none experiencing a decrease. The Emerging Business Banking segment saw the highest growth at 9.42% YoY, while Corporate Banking had the slowest expansion, increasing by only 2.42% YoY. We forecast that BNGA's consolidated loan portfolio will expand by 4.16% YoY in 2024.
Strong CASA Growth
As of March 2024, BNGA’s CASA position stood at IDR 160.11 trillion, marking a solid growth of 8.89% YoY. This growth was supported by a double-digit increase of 12.29% YoY in current accounts and a 5.77% YoY growth in savings accounts. Consequently, this led to an increase in the CASA Ratio by 25 basis points YoY to 64.55%. We forecast that BNGA’s CASA ratio will reach 64.89%, reflecting a 1.03% YoY increase by December 31st, 2024.
Asset Quality Remains Manageable
As of March 2024, BNGA’s consolidated NPL ratio remained manageable at 2.10%, which was 50 bps better than Q1-2023 despite a 10 bps increase on a quarterly basis. Additionally, the SML NPL ratio decreased to only 4.34% compared to Q1-2023’s 5.28%. We forecast that by December 2024, BNGA’s asset quality will remain healthy, with the gross NPL ratio and SML ratio expected to stand at 1.90% and 3.90%, respectively.
Robust Expansion of OCTO Mobile Transactions and QRIS Utilization
As of Q1-2024, the number of financial transactions via OCTO Mobile was 79.7 million, marking a solid growth of 113.10% compared to Q1-2023, resulting in a transaction value of IDR 98.5 trillion, a significant increase of 42.55% YoY. Additionally, the number of QRIS transactions from OCTO Mobile was 7.6 million.
Valuation: 23% Upside, Buy Recommendation
Our discounted dividend model (DDM) valuation sets a one-year target price at IDR 2,110, a revision from the previous target of IDR 2,610, which equates to a valuation of 0.99x PBV. With a potential upside of 23%, we recommend a BUY.
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