Live Chat Software
Berita Dan Riset Terbaru
Company Research
Danareksa Equity Snapshot - BBNI, 23 Januari 2020
January 23, 2020 09:28

Bank Negara Indonesia(BBNI IJ)

Steady Progress

We maintain our BUY call on BBNI with a GGM-derived TP of IDR9,000 following the inline FY19 results with 8.6% yoy loans growth in 2019. Post the 100bps policy rate cuts in 2019, we expect the NIM to remain stable at 4.9% this year mainly supported by BBNI’s ability to manage its blended CoF. Our NIM estimate reflects a flat asset yield at 7.9% with a 3.2% blended CoF. In addition, we assume higher credit costs at 189bps this year with an uptick in the gross NPLs ratio to 2.4% as of December 2020F on the back of the first year’s implementation of PSAK 71. 

FY19 highlights. The FY19 net profits of IDR15.4tn (+2.5% yoy) are inline on the lower side of our forecast due to higher than expected opex. While loans grew by 8.6% yoy with a 4.9% NIM on the back of a sticky blended CoF at 3.2% and a lower loans yield of 9.3% in FY19. Meanwhile, the credit costs continued to decline to 165bps, with a lower LLC ratio of 133.5% and an uptick in the gross NPLs ratio to 2.1% as of December 2019. For FY20F, BBNI’s management targets 10-12% yoy loans growth, 4.9% NIM, 42.0-44.0% CIR and a CASA contribution of 63-66% of total customer deposits by December 2020F.

Expect a 4.9% NIM this year. With lower loan yields that should impact its asset yields and a flattish blended CoF, NIM should touch 4.9% this year. We forecast flattish asset yields at 7.9% given the 52.5% corporate segment exposure to total loans by December 2020F in our model. Payroll loans, as another growth engine, are only expected to contribute 6.1% to total loans by December 2020F (December 2019: 4.8% of the total loans book).

More conservative stance on credit costs. We estimate credit costs at 189bps for FY20F given the bank’s sizeable exposure to corporate lending. The implementation of PSAK 71 should also imply more volatility in its provisions policy going forward in our view, mostly due to its sizeable exposure to corporate loans. In addition, BBNI’s management also provided guidance that it would allocate IDR13-15tn of provisions to comply with PSAK 71. This should lower its CAR by 200bps. As such, we prefer to be conservative on this matter and assume that the gross NPLs ratio hovers at 2.4% by the end of 2020F.

Maintain BUY, TP of IDR9,000. We maintain our BUY call on BBNI with a GGM-derived TP of IDR9,000 (implying 1.2x 2020F P/BV) assuming a 10.7% CoE, 13.6% sustainable ROAE and 3% long-term growth. Our TP is at its 5-year mean at 1.2x PBV. Short-term risks include changes to the management team as well as a higher-than-expected provisioning expenses and gross NPLs ratio due to PSAK 71 implementation.

… read more 20200123 BBNI