Equity Research – Company Update Tuesday, 30 April 2024

BUY Bank Negara Indonesia (BBNI IJ)

(Maintained) 1Q24: higher other operating income and lower
provisions offset lower NIM from a higher CoF
Last Price (Rp) 5,225 • BBNI booked 1Q24 NP of Rp5.4tr (+2% yoy, +3% qoq) supported by
Target Price (Rp) 6,800
higher other op. income and lower provisions, offsetting the lower NIM.
Previous Target Price (Rp) 6,800
• To boost NIM going forward, the bank aims to reprice its loans and
Upside/Downside +30.1%
reduce its exposure to high-rate USD time deposits.
No. of Shares (mn) 37,297 • Maintain Buy rating with a TP of Rp6,800 (unchanged). Key catalysts are
Mkt Cap (Rpbn/US$mn) 194,878/11,989 NIM recovery and a steady CoC.
Avg, Daily T/O
297.8/18.3
(Rpbn/US$mn) Lower NII (and NIM) caused by a higher CoF
Free Float (%) 39.8 BBNI booked 1Q24 NP of Rp5.4tr (+2% yoy, +3% qoq), in line with our forecast
(at 24.3% of FY24F est) but slightly below the consensus (at 22.5%). The bank
Major Shareholder (%) reported lower 1Q24 NII of Rp9.4tr (-10% yoy, -7% qoq) as NIM fell to 4.0%
Government of Indonesia 60.0 (1Q23/4Q23: 4.7/4.4%) due to an increase in the CoF to 3.2% (1Q23/4Q23:
2.3/2.6%). The higher CoF was driven by USD deposits (+40bps), while IDR
deposits increased by a smaller rate (+20bps). To minimize the impact of the
EPS Consensus (Rp) high USD TD rate, which could reach 6.8%, the bank has issued US$500mn (c.
2024F 2025F 2026F Rp800tr) of bonds with a coupon of 5.3%, which is part of the US$2bn re-tap
BRIDS 586.8 664.1 741.3
bond.
Consensus 633.4 713.1 797.1
1Q24 NP growth supported by other operating income and lower provisions
BRIDS/Cons (%) (7.4) (6.9) (7.0)
Offsetting the lower NIM, BBNI’s other operating income grew to Rp5.1tn
(+16% yoy), albeit still 20% lower than 4Q23’s high base, while provisions fell
to Rp1.7tn (-19% yoy, -30% qoq). The 1Q24 CoC of 1.0% ( -34bps yoy, -45bps
BBNI relative to JCI Index qoq) was supported by the release of the corporate segment provisions at -
0.6% in 1Q24 (vs -0.7% in 1Q23) and a lower CoC in the consumer and small
enterprise segments.

Aiming to increase NIM while maintaining a low CoC

To support earnings, BBNI will continue to maximize fee-based income and
achieve a lower CoC (at c. 1%). Concurrently, to bring NIM closer to the
current guidance of 4.5% vs 4.0% in 1Q24 (no new guidance yet), the bank
aims to reprice its loans (c. Rp30-50tn) by 50bps in 2Q24 and lower its USD
deposit rate, partly backed by the USD bond issuance and less aggressive USD
loan disbursement. To maintain a low CoC, the bank aims for stricter loans
disbursement to the SME segment, while continuing to maintain assets
Source: Bloomberg quality in the consumer and corporate segments.

Maintain Buy rating with an unchanged TP

We keep our FY24-25F forecast and valuation unchanged (CoE: 10.1%, FY14F
RoE: 14%). Hence, our FV PBV is maintained at 1.5x and we keep our Buy
rating on the stock. Risks to our view are a persistently high CoF, failure to
reprice loans, and higher NPL.
BRI Danareksa Sekuritas Analysts
Key Financials
Victor Stefano Year to 31 Dec 2022A 2023A 2024F 2025F 2026F
(62-21) 5091 4100 x. 3503 PPOP (Rpbn) 34,413 34,970 37,920 42,740 45,374
[email protected] Net profit (Rpbn) 18,312 20,909 21,886 24,768 27,650
EPS (Rp) 491.0 560.6 586.8 664.1 741.3
EPS growth (%) (16.0) 14.2 4.7 13.2 11.6
BVPS (Rp) 3,641.4 4,025.3 4,376.8 4,795.2 5,260.0
Naura Reyhan Muchlis PER (x) 10.6 9.3 8.9 7.9 7.0
(62-21) 5091 4100 x. 3507 PBV (x) 1.4 1.3 1.2 1.1 1.0
[email protected] Dividend yield (%) 3.8 4.3 4.5 5.1 5.7
ROAE (%) 14.1 14.6 14.0 14.5 14.7
Source: BBNI, BRIDS Estimates
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Equity Research – Company Update Tuesday, 30 April 2024

Exhibit 1. BBNI 1Q24 results summary

Source: Company, BRIDS Estimates

Exhibit 2. BBNI’s cost of equity band chart (5-year) Exhibit 3. Big 4 Banks’ cost of equity band chart (5-year)

Source: Company, Bloomberg, BRIDS Source: Company, Bloomberg, BRIDS

Exhibit 4. BBNI’s PBV band chart (5-year) Exhibit 5. BBNI’s PE band chart (5-year)

Source: Company, Bloomberg, BRIDS Source: Company, Bloomberg, BRIDS

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Equity Research – Company Update Tuesday, 30 April 2024

Exhibit 6. Loans and Growth Exhibit 7. Net Interest Income and Growth

Source: Company, BRIDS Estimates Source: Company, BRIDS Estimates

Exhibit 8. NIM and LDR Exhibit 9. NPLs

Source: Company, BRIDS Estimates Source: Company, BRIDS Estimates

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Equity Research – Company Update Tuesday, 30 April 2024

Exhibit 10. Income Statement

Year to 31 Dec (Rpbn) 2022A 2023A 2024F 2025F 2026F
Interest Income 54,659 61,472 66,516 68,194 71,838
Interest Expense (13,338) (20,196) (22,259) (19,349) (20,038)
Net Interest Income 41,321 41,276 44,257 48,845 51,800
Non-Interest Income (NII) 18,804 20,218 24,227 27,694 30,627
Oper. Income 60,125 61,494 68,484 76,539 82,427
Oper. Expenses (27,059) (27,778) (30,564) (33,799) (37,053)
Pre-provisions profit 34,413 34,970 37,920 42,740 45,374
Provisions & Allowances (11,514) (9,196) (10,626) (11,899) (10,963)
Operating Profits 22,899 25,773 27,294 30,841 34,411
Non-Operating Income (212) (134) (182) (165) (182)
Exceptionals 0 0 0 0 0
Pre-tax Profit 22,687 25,640 27,113 30,676 34,229
Income Tax (4,205) (4,534) (5,016) (5,675) (6,332)
Minorities (170) (197) (211) (233) (247)
Net Profit 18,312 20,909 21,886 24,768 27,650

Exhibit 11. Balance Sheet

Year to 31 Dec (Rpbn) 2022A 2023A 2024F 2025F 2026F
Gross Loans 646,188 695,085 758,333 827,801 890,651
Provisions (50,334) (47,158) (52,874) (57,045) (60,979)
Net Loans 595,854 647,927 705,459 770,756 829,672
Govt. Bonds 121,291 127,099 101,685 81,352 65,086
Securities 28,556 37,165 35,474 33,876 32,367
Other Earnings Assets 0 0 0 0 0
Total Earnings Assets 920,484 989,203 1,023,212 1,069,803 1,114,170
Fixed Assets 41,755 44,688 47,519 50,854 54,383
Non-Earnings Assets 18,496 21,667 19,077 19,354 18,255
Total Assets 1,029,837 1,086,664 1,158,210 1,235,192 1,296,596

Customer Deposits 769,269 810,730 871,281 938,769 988,793

Banks Deposits 15,245 11,894 11,945 11,995 12,046
Int. Bearing Liab. - Others 0 0 0 0 0
Total Liabilities 889,639 931,931 990,153 1,051,297 1,095,121
Share capital & Reserves 41,756 42,896 42,896 42,896 42,896
Retained Earnings 94,060 107,236 120,349 135,954 153,287
Shareholders' Funds 135,816 150,131 163,244 178,849 196,183
Minority interests 4,382 4,602 4,812 5,045 5,292
Total Equity & Liabilities 1,029,837 1,086,664 1,158,210 1,235,192 1,296,596

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Equity Research – Company Update Tuesday, 30 April 2024

Exhibit 12. Key Ratios

Year to 31 Dec 2022A 2023A 2024F 2025F 2026F
Yield on Earning Assets 6.0 6.4 6.6 6.5 6.6
Cost of funds 1.6 2.3 2.4 2.0 1.9
Interest Spread 4.4 4.1 4.2 4.5 4.6
Net Interest Margin 4.6 4.3 4.4 4.7 4.7
Cost/Income Ratio 44.0 44.3 44.6 44.2 45.0
Oper. Exp./Oper. Gross Inc. 69.4 68.9 69.9 67.8 66.4
Gross NPL Ratio 2.8 2.1 2.3 2.5 2.6
LLP/Gross NPL 277.1 317.9 298.0 279.4 265.4
Cost of Credit 1.9 1.4 1.5 1.5 1.3
Loan to Deposit Ratio 84.0 85.7 87.0 88.2 90.1
Loan to Funding Ratio 83.5 85.2 85.6 86.8 88.8
CASA Mix 71.0 70.2 68.3 69.0 71.8
ROAE 14.1 14.6 14.0 14.5 14.7
ROAA 1.8 2.0 1.9 2.1 2.2
CAR 19.4 19.3 19.5 19.3 19.4

Exhibit 13. Dupont and Growth

Year to 31 Dec 2022A 2023A 2024F 2025F 2026F
Dupont
Pre-Tax ROAA 2.3 2.4 2.4 2.6 2.7
Tax Retention rate 81.5 82.3 81.5 81.5 81.5
Post-Tax ROAA 1.9 2.0 2.0 2.1 2.2
Goodwil, Assoc& Min 0.0 0.0 0.0 0.0 0.0
Leverage 7.7 7.4 7.2 7.0 6.8
ROAE 14.1 14.6 14.0 14.5 14.7
Growth (%)
Interest income 9.3 12.5 8.2 2.5 5.3
Net Interest Income 8.0 (0.1) 7.2 10.4 6.1
Other Oper. Expenses 9.1 2.7 10.0 10.6 9.6
Fee Based Income 8.9 3.9 23.3 10.4 6.1
Pre-Provision Oper. Profit 10.8 1.6 8.4 12.7 6.2
Net Profit 68.0 14.2 4.7 13.2 11.6
Shareholders’ Equity 9.8 10.5 8.7 9.6 9.7
Loan 10.9 7.6 9.1 9.2 7.6
Earnings Asset 2.9 7.5 3.4 4.6 4.1
Deposit 5.5 4.9 7.4 7.6 5.3
Int. Bearing Liab. 6.1 4.5 6.5 6.4 4.3
CASA 10.1 3.6 4.4 8.8 9.6
Total Asset 6.7 5.5 6.6 6.6 5.0

Source : BBNI, BRIDS Estimates

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Equity Research – Company Update Tuesday, 30 April 2024

BRI Danareksa Equity Research Team

Erindra Krisnawan, CFA Head of Equity Research, Strategy, Coal [email protected]
Natalia Sutanto Consumer, Cigarettes, Pharmaceuticals, Retail [email protected]
Niko Margaronis Telco, Tower, Technology, Media [email protected]
Hasan Barakwan Metal, Oil and Gas [email protected]
Victor Stefano Banks, Poultry [email protected]
Ismail Fakhri Suweleh Healthcare, Property, Industrial Estate [email protected]
Richard Jerry, CFA Automotive, Cement [email protected]
Ni Putu Wilastita Muthia Sofi Research Associate [email protected]
Naura Reyhan Muchlis Research Associate [email protected]
Sabela Nur Amalina Research Associate [email protected]
Christian Immanuel Sitorus Research Associate [email protected]

BRI Danareksa Economic Research Team

Helmy Kristanto Chief Economist, Macro Strategy [email protected]
Dr. Telisa Aulia Falianty Senior Advisor [email protected]
Kefas Sidauruk Economist [email protected]

BRI Danareksa Institutional Equity Sales Team

Yofi Lasini Head of Institutional Sales and Dealing [email protected]
Novrita Endah Putrianti Institutional Sales Unit Head [email protected]
Ehrliech Suhartono Institutional Sales Associate [email protected]
Yunita Nababan Institutional Sales Associate [email protected]
Adeline Solaiman Institutional Sales Associate [email protected]
Andreas Kenny Institutional Sales Associate [email protected]
Christy Halim Institutional Sales Associate [email protected]
Jason Joseph Institutional Sales Associate [email protected]

BRI Danareksa Sales Traders

Mitcha Sondakh Head of Sales Trader [email protected]
Suryanti Salim Sales Trader [email protected]

INVESTMENT RATING
BUY Expected total return of 10% or more within a 12-month period
HOLD Expected total return between -10% and 10% within a 12-month period
SELL Expected total return of -10% or worse within a 12-month period

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