BNGA
Contact our analyst Achmadi
28% upside. Buy.
March 21th, 2024
Price Rp 2,040
Target price Rp2,610
Highest Profit Ever
In 2023, BNGA recorded a consolidated net profit surge of 28.40% YoY, reaching IDR 6.47 trillion, marking the highest profit in its history. This achievement was propelled by improvements in asset quality and efficiency, evidenced by a 47.38% YoY reduction in provision expenses. Interest income saw a significant rise of 16.70% YoY. However, interest expenses soared by 58.81% YoY, leading to a 29-basis point decline in the NIM ratio to 4.40%. We predict BNGA will continue its faster growth trajectory, with profits expected to grow by 13.50% to IDR 7.35 trillion in 2024.
Exceeding Loan Growth Targets for 2023
By December 2023, BNGA's consolidated loan portfolio reached IDR 213.37 trillion, marking an 8.52% YoY increase (excluding salam-financing) and surpassing its 6%-8% growth target. The corporate segment, as the primary contributor, saw an 11.66% YoY increase. Shariah financing also significantly contributed to loan growth, with a 17.06% YoY increase. Predictions for December 2024 suggest a further expansion of BNGA's consolidated loan portfolio by 7.04%.
Advancing Sustainable Financing: A Firm ESG Commitment
BNGA's loan portfolio growth of 8.52% YoY included notable advancements in sustainable financing, which increased by 7.81% YoY to IDR 55.46 trillion, making up 25.9% of the total. Additionally, 29% of CPO debtors are pursuing or have obtained ISPO and/or RSPO certification, surpassing the 5% growth target, as the sustainable CPO portfolio expanded by 17% YoY.
Maintaining Growth in CASA Ratio
As of December 2023, BNGA's CASA Ratio was 63.86%, up by 29 basis points YoY, driven by a robust customer growth of 25.2% YoY. This is also reflected in the significant increase of digital savings account openings by 84.84% YoY. The CASA ratio is expected to further increase to 64.61% by December 2024.
Asset Quality Remains Robust
BNGA's gross NPL ratio improved significantly, dropping by 83 basis points YoY to 1.96% in December 2023, a figure even lower than pre-COVID levels in 2019. This improvement is attributed to a diversified and enhanced portfolio mix. The cost of credit also decreased by 81 basis points YoY to 1.04%. BNGA's consolidated NPL ratio is forecasted to improve to 1.82%, a 14-basis point decrease from 2023.
Valuation: 28% Upside, Buy Recommendation.
Our DDM valuation sets a one-year target price at IDR 2,610, equivalent to a valuation of 1.23x PBV. With potential upside of 28% , we recommend a BUY.
In 2023, BNGA recorded a consolidated net profit surge of 28.40% YoY, reaching IDR 6.47 trillion, marking the highest profit in its history. This achievement was propelled by improvements in asset quality and efficiency, evidenced by a 47.38% YoY reduction in provision expenses. Interest income saw a significant rise of 16.70% YoY. However, interest expenses soared by 58.81% YoY, leading to a 29-basis point decline in the NIM ratio to 4.40%. We predict BNGA will continue its faster growth trajectory, with profits expected to grow by 13.50% to IDR 7.35 trillion in 2024.
Exceeding Loan Growth Targets for 2023
By December 2023, BNGA's consolidated loan portfolio reached IDR 213.37 trillion, marking an 8.52% YoY increase (excluding salam-financing) and surpassing its 6%-8% growth target. The corporate segment, as the primary contributor, saw an 11.66% YoY increase. Shariah financing also significantly contributed to loan growth, with a 17.06% YoY increase. Predictions for December 2024 suggest a further expansion of BNGA's consolidated loan portfolio by 7.04%.
Advancing Sustainable Financing: A Firm ESG Commitment
BNGA's loan portfolio growth of 8.52% YoY included notable advancements in sustainable financing, which increased by 7.81% YoY to IDR 55.46 trillion, making up 25.9% of the total. Additionally, 29% of CPO debtors are pursuing or have obtained ISPO and/or RSPO certification, surpassing the 5% growth target, as the sustainable CPO portfolio expanded by 17% YoY.
Maintaining Growth in CASA Ratio
As of December 2023, BNGA's CASA Ratio was 63.86%, up by 29 basis points YoY, driven by a robust customer growth of 25.2% YoY. This is also reflected in the significant increase of digital savings account openings by 84.84% YoY. The CASA ratio is expected to further increase to 64.61% by December 2024.
Asset Quality Remains Robust
BNGA's gross NPL ratio improved significantly, dropping by 83 basis points YoY to 1.96% in December 2023, a figure even lower than pre-COVID levels in 2019. This improvement is attributed to a diversified and enhanced portfolio mix. The cost of credit also decreased by 81 basis points YoY to 1.04%. BNGA's consolidated NPL ratio is forecasted to improve to 1.82%, a 14-basis point decrease from 2023.
Valuation: 28% Upside, Buy Recommendation.
Our DDM valuation sets a one-year target price at IDR 2,610, equivalent to a valuation of 1.23x PBV. With potential upside of 28% , we recommend a BUY.
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