BNGA
Contact our analyst Achmadi
17% upside. Hold.
November 29th, 2022
Price Rp 1,170
Target price Rp1,370
Net Profit increased by +22%
In 9M22, BNGA’s Net Profit grew by +21.97% YoY from IDR 3.15 trillion to IDR 3.84 trillion. The growth was driven by Non-Interest Income which grew by +19.61% YoY. Fees and commissions became a major contributor while FX and Derivatives had the highest YoY growth at +117.1%. For Net Interest Income, there was no significant change as it grew by only +0.87% YoY. We forecast BNGA will continue to grow Net Profit by +30.40%, from IDR 4.10 trillion in FY21 to IDR 5.34 trillion in FY22.
Solid Loan Growth
As of September 2022, BNGA reported solid consolidated loan growth of +10.00% YoY with Non-Bank loans having the highest growth at almost +60% compared to the same period last year. Consumer loans grew fastest among the segments at +14.75% YoY. Other loan segments grew too, except Commercial Banking which declined by -3.21% due to repositioning to focus on lower sized Commercial loans (Medium Enterprises) which offer better risk-adjusted returns. Corporate and EBB loans grew by +12.78% and +8.75% respectively. We project BNGA will continue to grow its consolidated loan portfolio by +9.45% YoY in FY22.
Higher NPL ratio
Although still within OJK’s requirement, BNGA’s NPL ratio was worse than 9M21. It increased by +20 bps YoY to 3.55% in 9M22. COVID-19 restrictions are still one of the major factors for a higher NPL ratio and the hospitality industry. Is particularly negatively affected. We assume BNGA’s NPL ratio will remain stable at 3.55% in FY22, similar to 9M22 or up by +12 bps YoY from FY21.
Valuation: 17% Upside, HOLD.
Based on our DDM Valuation, we have a target price within one year of IDR 1,370 or trading at 0.7x PBV which gives a 17% potential upside, we recommend HOLD.
In 9M22, BNGA’s Net Profit grew by +21.97% YoY from IDR 3.15 trillion to IDR 3.84 trillion. The growth was driven by Non-Interest Income which grew by +19.61% YoY. Fees and commissions became a major contributor while FX and Derivatives had the highest YoY growth at +117.1%. For Net Interest Income, there was no significant change as it grew by only +0.87% YoY. We forecast BNGA will continue to grow Net Profit by +30.40%, from IDR 4.10 trillion in FY21 to IDR 5.34 trillion in FY22.
Solid Loan Growth
As of September 2022, BNGA reported solid consolidated loan growth of +10.00% YoY with Non-Bank loans having the highest growth at almost +60% compared to the same period last year. Consumer loans grew fastest among the segments at +14.75% YoY. Other loan segments grew too, except Commercial Banking which declined by -3.21% due to repositioning to focus on lower sized Commercial loans (Medium Enterprises) which offer better risk-adjusted returns. Corporate and EBB loans grew by +12.78% and +8.75% respectively. We project BNGA will continue to grow its consolidated loan portfolio by +9.45% YoY in FY22.
Higher NPL ratio
Although still within OJK’s requirement, BNGA’s NPL ratio was worse than 9M21. It increased by +20 bps YoY to 3.55% in 9M22. COVID-19 restrictions are still one of the major factors for a higher NPL ratio and the hospitality industry. Is particularly negatively affected. We assume BNGA’s NPL ratio will remain stable at 3.55% in FY22, similar to 9M22 or up by +12 bps YoY from FY21.
Valuation: 17% Upside, HOLD.
Based on our DDM Valuation, we have a target price within one year of IDR 1,370 or trading at 0.7x PBV which gives a 17% potential upside, we recommend HOLD.
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