BNGA
Contact our analyst Lingga
17% upside. Hold.
17 December, 2019
Price Rp965
Target price Rp1130
Growth of CASA
As of September 2019, total Third Party Funds ("DPK") was Rp 190.3 trillion with a low-cost fund (CASA) ratio of 53.67%. Saving deposits experienced pretty good growth of 5.9% YoY, which was supported by the Bank's commitment to develop digital services and improve customer experience. There were declines in current accounts -8.9% and time deposits -2.9%, mainly because of a decrease in the non-retail segment. BNGA will continue to focus on increasing CASA through investments in digital channels and also augmenting digital service features.
Loan Growth 4.9% YoY
During 9M19, loan growth was 4.9% YoY. Slower loan growth was influenced by market demand and the decline is in line with the slower growth of total bank credits to the single-digit range (compared to 11% YoY in 2018). BNGA focus in 2019 has been on improving asset quality, which can be seen in the NPL ratio which decreased by 4.1% YoY. We estimate loan growth during 2019-2020 will be 5% on average compared to 2018A.
Cost of Credit grew 1.79%
Cost of Credit in 9M19 increased by 1.79% YoY as part of the Bank's principle to maintain adequate reserves based on applicable regulations, We estimate that cost of credit will increased by an average 2% during 2019-2020 compared to 2018A.
Valuation: 17% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 1130. or trading at 0.6x PBV which gives 17% potential upside, Hold.
As of September 2019, total Third Party Funds ("DPK") was Rp 190.3 trillion with a low-cost fund (CASA) ratio of 53.67%. Saving deposits experienced pretty good growth of 5.9% YoY, which was supported by the Bank's commitment to develop digital services and improve customer experience. There were declines in current accounts -8.9% and time deposits -2.9%, mainly because of a decrease in the non-retail segment. BNGA will continue to focus on increasing CASA through investments in digital channels and also augmenting digital service features.
Loan Growth 4.9% YoY
During 9M19, loan growth was 4.9% YoY. Slower loan growth was influenced by market demand and the decline is in line with the slower growth of total bank credits to the single-digit range (compared to 11% YoY in 2018). BNGA focus in 2019 has been on improving asset quality, which can be seen in the NPL ratio which decreased by 4.1% YoY. We estimate loan growth during 2019-2020 will be 5% on average compared to 2018A.
Cost of Credit grew 1.79%
Cost of Credit in 9M19 increased by 1.79% YoY as part of the Bank's principle to maintain adequate reserves based on applicable regulations, We estimate that cost of credit will increased by an average 2% during 2019-2020 compared to 2018A.
Valuation: 17% Upside, Hold.
Based on our DDM Valuation, we have a target price within one year of IDR 1130. or trading at 0.6x PBV which gives 17% potential upside, Hold.
