BNGA
Contact our analyst Achmadi
17.42% upside. Buy.
17th March, 2025
Price Rp 1,665
Target price Rp1,955
BNGA’s Earnings Rose at a Slower Pace
In 2024, BNGA recorded profit attributable to the parent entity (PATMI) of IDR 6.83 trillion, reflecting 5.43% YoY growth, slightly improving from 4.72% YoY growth in 9M-2024. This moderate growth was primarily due to a 22.42% YoY increase in interest expenses, which offset 8.61% YoY growth in interest income, leading to a Net Interest Margin (NIM) decline of 31 bps to 4.09%.. However, strong foreign exchange gains, which surged 333.95% YoY, helped sustain profitability beyond 9M-2024 levels. Additionally, provision expenses declined by 10.03% YoY, providing further support to earnings. We forecast BNGA’s PATMI to reach IDR 7.59 trillion by the end of 2025, reflecting 11.26% YoY growth, with NIM stabilizing at 4.07%.
BNGA Strengthens ESG Efforts Amid Slower Loan Growth
As of December 2024, BNGA’s consolidated loan portfolio grew by 6.86% YoY, slightly below the 8.52% growth in 2023. While some segments saw slower expansion, all segments recorded positive growth, led by SME Banking at 9.10% YoY. BNGA reinforced its ESG commitments, allocating 25.9% of total financing to sustainable finance, supporting climate action and sustainable development. This amounted to IDR 59.1 trillion, up 6.56% YoY, with 46% (IDR 26.99 trillion) channeled to MSMEs. Looking ahead, we forecast BNGA’s consolidated loan portfolio to grow by 7.84% YoY in 2025.
BNGA Strengthens Liquidity with CASA Growth
BNGA maintained strong liquidity in 2024. Third-party deposits increased by 10.51% YoY, driven by a 25.39% YoY increase in current accounts, leading to a 215-bps YoY rise in the CASA ratio. This growth was supported by BNGA’s strategy to expand sticky CASA in retail and non-retail segments through digital partnerships and physical expansion. Savings accounts grew by 3.68% YoY, while time deposits increased by 3.92% YoY. We expect third-party deposits to grow by 7.97% YoY by the end of 2025, with the CASA ratio rising to 67.02%.
BNGA’s Asset Quality Strengthens with Lower NPLs
BNGA continued to improve asset quality, with the consolidated gross NPL ratio declining by 20 bps YoY to 1.76% in December 2024. The bank-only NPL ratio also improved to 1.79%, down from 1.99% in 2023, reflecting prudent risk management. We forecast BNGA’s consolidated NPL ratio to decline further to 1.53% by the end of 2025, while the bank-only NPL ratio is expected to improve to 1.46%.
Valuation: 17.42% Upside, Buy.
Using a dividend discount model (DDM) multi-stage valuation, we adjust BNGA’s target price to IDR 1,955, slightly down from the previous IDR 1,965. This implies a 0.84x price-to-book value (PBV) and offers a 17.42% upside potential. We maintain our Buy recommendation for BNGA.
In 2024, BNGA recorded profit attributable to the parent entity (PATMI) of IDR 6.83 trillion, reflecting 5.43% YoY growth, slightly improving from 4.72% YoY growth in 9M-2024. This moderate growth was primarily due to a 22.42% YoY increase in interest expenses, which offset 8.61% YoY growth in interest income, leading to a Net Interest Margin (NIM) decline of 31 bps to 4.09%.. However, strong foreign exchange gains, which surged 333.95% YoY, helped sustain profitability beyond 9M-2024 levels. Additionally, provision expenses declined by 10.03% YoY, providing further support to earnings. We forecast BNGA’s PATMI to reach IDR 7.59 trillion by the end of 2025, reflecting 11.26% YoY growth, with NIM stabilizing at 4.07%.
BNGA Strengthens ESG Efforts Amid Slower Loan Growth
As of December 2024, BNGA’s consolidated loan portfolio grew by 6.86% YoY, slightly below the 8.52% growth in 2023. While some segments saw slower expansion, all segments recorded positive growth, led by SME Banking at 9.10% YoY. BNGA reinforced its ESG commitments, allocating 25.9% of total financing to sustainable finance, supporting climate action and sustainable development. This amounted to IDR 59.1 trillion, up 6.56% YoY, with 46% (IDR 26.99 trillion) channeled to MSMEs. Looking ahead, we forecast BNGA’s consolidated loan portfolio to grow by 7.84% YoY in 2025.
BNGA Strengthens Liquidity with CASA Growth
BNGA maintained strong liquidity in 2024. Third-party deposits increased by 10.51% YoY, driven by a 25.39% YoY increase in current accounts, leading to a 215-bps YoY rise in the CASA ratio. This growth was supported by BNGA’s strategy to expand sticky CASA in retail and non-retail segments through digital partnerships and physical expansion. Savings accounts grew by 3.68% YoY, while time deposits increased by 3.92% YoY. We expect third-party deposits to grow by 7.97% YoY by the end of 2025, with the CASA ratio rising to 67.02%.
BNGA’s Asset Quality Strengthens with Lower NPLs
BNGA continued to improve asset quality, with the consolidated gross NPL ratio declining by 20 bps YoY to 1.76% in December 2024. The bank-only NPL ratio also improved to 1.79%, down from 1.99% in 2023, reflecting prudent risk management. We forecast BNGA’s consolidated NPL ratio to decline further to 1.53% by the end of 2025, while the bank-only NPL ratio is expected to improve to 1.46%.
Valuation: 17.42% Upside, Buy.
Using a dividend discount model (DDM) multi-stage valuation, we adjust BNGA’s target price to IDR 1,955, slightly down from the previous IDR 1,965. This implies a 0.84x price-to-book value (PBV) and offers a 17.42% upside potential. We maintain our Buy recommendation for BNGA.
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