BNGA
Contact our analyst Achmadi
24% upside. Buy.
November 16th, 2023
Price Rp 1710
Target price Rp2,120
Net Profit Surges
In 9M2023, BNGA achieved solid net profit growth, rising by 27.55% YoY. This growth was driven by a 19.20% increase in interest income and a 39.20% increase in other fees and commissions. Despite this, the net interest margin (NIM) ratio decreased by 44 basis points YoY to 4.33%, attributed to a 61.23% YoY increase in interest expense. A 36.79% decrease in provision expenses contributed to a higher net profit, leading to a profit forecast of another 30.76% YoY increase to IDR 6.59 trillion for FY23.
LDR Rose by 40 bps Quarterly
As of September 2023, BNGA's consolidated loan portfolio grew significantly by 5.22%, causing a 40 basis points quarterly increase in the Loan-to-Deposit Ratio (LDR) to 86.40%. Notable loan growth was observed in the EBB segment with an 8.20% YoY increase, followed by the Corporate segment at 6.00% YoY. Consumer banking grew by 5.90%, while commercial banking saw a slight decrease of -0.06%. On the liability side, the CASA ratio increased by 1% quarterly to 66.70%, driven by a substantial 7.28% QoQ growth in Current Account deposits. Overall, the bank's deposits grew by 6.04% YoY. Projections indicate continued expansion in loans (5.13% growth) and stability in the CASA ratio (66.29%).
Improved Asset Quality
BNGA's asset quality significantly improved, with the consolidated NPL ratio dropping by 120 bps YoY to 2.40%, attributed to its strategy of "Preservation of Capital and Balanced Risk Culture." The Cost of Credit decreased by 90 bps YoY to 0.40%. Our forecast assumes continued maintenance of asset quality with a decrease of consolidated gross NPL to 2.36% in FY23.
ESG Commitment to Support Climate Action
BNGA's serious commitment is evident in its sustainable financing portfolio, reaching IDR 52.55 trillion for 9M23, which is 25.6% of the total and experiencing significant 8.82% growth compared to 9M22. The highest portion came from MSME, accounting for 36.2% of the total.
Valuation: 24% Upside, Buy.
Based on our DDM Valuation, we now have a one-year target price of IDR 2,120 or a valuation of 1.1x PBV. With a potential upside of 24%, we advise a BUY.
In 9M2023, BNGA achieved solid net profit growth, rising by 27.55% YoY. This growth was driven by a 19.20% increase in interest income and a 39.20% increase in other fees and commissions. Despite this, the net interest margin (NIM) ratio decreased by 44 basis points YoY to 4.33%, attributed to a 61.23% YoY increase in interest expense. A 36.79% decrease in provision expenses contributed to a higher net profit, leading to a profit forecast of another 30.76% YoY increase to IDR 6.59 trillion for FY23.
LDR Rose by 40 bps Quarterly
As of September 2023, BNGA's consolidated loan portfolio grew significantly by 5.22%, causing a 40 basis points quarterly increase in the Loan-to-Deposit Ratio (LDR) to 86.40%. Notable loan growth was observed in the EBB segment with an 8.20% YoY increase, followed by the Corporate segment at 6.00% YoY. Consumer banking grew by 5.90%, while commercial banking saw a slight decrease of -0.06%. On the liability side, the CASA ratio increased by 1% quarterly to 66.70%, driven by a substantial 7.28% QoQ growth in Current Account deposits. Overall, the bank's deposits grew by 6.04% YoY. Projections indicate continued expansion in loans (5.13% growth) and stability in the CASA ratio (66.29%).
Improved Asset Quality
BNGA's asset quality significantly improved, with the consolidated NPL ratio dropping by 120 bps YoY to 2.40%, attributed to its strategy of "Preservation of Capital and Balanced Risk Culture." The Cost of Credit decreased by 90 bps YoY to 0.40%. Our forecast assumes continued maintenance of asset quality with a decrease of consolidated gross NPL to 2.36% in FY23.
ESG Commitment to Support Climate Action
BNGA's serious commitment is evident in its sustainable financing portfolio, reaching IDR 52.55 trillion for 9M23, which is 25.6% of the total and experiencing significant 8.82% growth compared to 9M22. The highest portion came from MSME, accounting for 36.2% of the total.
Valuation: 24% Upside, Buy.
Based on our DDM Valuation, we now have a one-year target price of IDR 2,120 or a valuation of 1.1x PBV. With a potential upside of 24%, we advise a BUY.
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