Bank Negara Indonesia(BBNI IJ)

Transcription

1 Equity Research Company Update Thursday,18 January 2018 HOLD Maintain Last price (IDR) 9,600 Target Price (IDR) 8,500 Upside/Downside 11.5% Previous Target Price (IDR) 8,500 Stock Statistics Sector Bloomberg Ticker Banking BBNI IJ No of Shrs (mn) 18,649 Mkt. Cap (IDRbn/USDmn) 179,027/13,422 Avg. daily T/O (IDRbn/USDmn) 144.6/10.8 Major shareholders (%) Government of Indonesia 60.0 Estimated free float 40.0 EPS Consensus (IDR) 2017F 2018F 2019F Danareksa Consensus Danareksa/Cons (1.7) (2.2) (1.0) BBNI relative to JCI Index Bank Negara Indonesia(BBNI IJ) Waiting for more catalysts to come We reiterate our HOLD call on BBNI with an unchanged GGMderived TP of IDR8,500 post its FY17 result with net profits of IDR13.6tn. Despite lower credit costs at 171bps, we are still waiting for more positive catalysts. The bank s management has also emphasised the potential threat facing its SOE corporate lending segment which comes from securities issuance post JSMR s komodo bonds issuance recently. Despite that, we expect 5.8% NIM this year on the back of a 10bps fall in the assets yield to 8.5% and a 10bps drop in the blended CoF to 2.9%. 2017: At a glance. BBNI s net profits of IDR13.6tn were slightly above our expectation (104%) due to lower credit costs at 171bps (vs our forecast of 207bps) with around a 70bps drop in NIM to 5.5%. The 12.2% loans growth, yet, was below our forecast as the bank s management sought to maintain its corporate (SOE and nonsoe) lending exposure at 50% of loans book. As for the gross NPLs ratio, it dropped significantly to 2.3% on the back of sizeable writeoffs of IDR8.7tn with IDR3tn coming from the corporate segment. Size is the key constraint. As BBNI and BMRI have similar business models with a focus on corporate lending, the two banks face the same challenge to support government infrastructure projects. BBNI has IDR35.7tn of governmentrelated infrastructure project loans in the pipeline for this year. Nonetheless, we foresee a lower amount since we believe that the SOE borrowers will opt to issue securities to diversify their funding structure, especially in view of the cheaper funding costs following JSMR s recent komodo bonds issuance. Stabilised NIM. Given the bank s significant exposure to corporate lending, particularly infrastructure projects, we expect the loan yield to continue to decline by 20bps to 9.4% this year. This, in turn, should cause the assets yield to dip to 8.5%. The blended CoF, meanwhile, will improve to 2.9% on the back of a higher proportion of CASA deposits at 66.4% of total customer deposits by the end of the year. All in all, we expect this year s NIM to reach 5.8%. Source : Bloomberg Eka Savitri (6221) ext 3506 eka.savitri@danareksa.co.id Maintain HOLD, TP of IDR8,500. We maintain our HOLD call on BBNI with an unchanged GGMderived TP of IDR8,500 (implying 1.5x P/BV for 2018F) assuming 10.6% CoE, 14% sustainable ROAE and 3% longterm growth. Key Financials Year to 31 Dec 2015A 2016A 2017F 2018F 2019F PPOP (IDRbn) 18,748 22,082 25,371 28,550 32,514 Net profit (IDRbn) 9,067 11,339 13,089 14,997 16,930 EPS (IDR) EPS growth (%) BVPS (IDR) 4, , , , ,569.7 PER (x) PBV (x) Dividend yield (%) ROAE (%) Source : BBNI, Danareksa Estimates See important disclosure at the back of this report 1

2 Jan07 Jul07 Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 Jan14 Jul14 Jan15 Jul15 Jan16 Jul16 Jan17 Jul17 Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13 Jul13 Jan14 Jul14 Jan15 Jul15 Jan16 Jul16 Jan17 Jul17 Exhibit 1. LOAN AND GROWTH Exhibit 2. NET INTEREST INCOME AND GROWTH Exhibit 3. NIM AND LDR Exhibit 4. NPL Exhibit 5. PE BAND CHART Exhibit 6. PBV BAND CHART 2.50 x % Fwd P/E Mean +1SD 1SD Fwd P/BV Mean +1SD 1SD ROAE (RHS) See important disclosure at the back of this report 2

3 Exhibit 7. BBNI s result FYE Dec (IDR bn) 4Q16 3Q17 4Q17 QoQ (%) YoY (%) FY16 FY17 YoY (%) Comments Net interest Reported NIM (%) 8,121 10,174 8,427 (17.2) ,995 31, Noninterest 3,322 6,252 3,728 (40.4) ,304 13, NonII/Total (%) Operating 11,443 16,426 12,155 (26.0) ,299 45, Operating (5,697) (4,976) (6,112) (19,217) expenses (20,863) 8.6 CostIncome Ratio (%) PPOP 5,746 11,450 6,043 (47.2) ,082 24, NIM fell by c.70bps due to rebalanced loan mixture more towards corporate lending Provisions (1,243) (6,842) (1,637) (76.1) 31.7 (7,853) (7,126) (9.3) Credit cost annualised (bps) Pretax profit 4,602 4,587 4,402 (4.0) (4.4) 14,303 17, Tax (967) (927) (1,034) (2,964) (3,549) 19.7 Effective tax rate (%) Net Profit 3,629 3,634 3,459 (4.8) (4.7) 11,339 13, Other Key Data and Ratios Gross loans 393, , ,314 Customer deposits 435, , ,098 Gross NPLs Total assets Shareholders ' equity 11,641 11,589 10, , , , (12.4) (12.8) , ,545 11, , , , , ,150 (12.8) ,254 97, , , , Driven by +23.6% yoy growth in time deposits ROAA (%) ROAE (%) LDR (%) Gross NPLs ratio (%) Improved significantly due to IDR8.7tn writeoffs in 2017 (vs IDR3tn in 2016) LLC (%) CAR (%) Source : Company, Danareksa Sekuritas estimates See important disclosure at the back of this report 3

4 Exhibit 8. Income Statement Year to 31 Dec (IDRbn) 2015A 2016A 2017F 2018F 2019F Interest Income 36,895 43,768 49,675 55,673 62,385 Interest Expense (11,335) (13,773) (15,848) (17,638) (19,201) Net Interest Income 25,560 29,995 33,828 38,035 43,184 NonInterest Income (NII) 9,090 10,702 13,047 15,297 18,144 Oper. Income 34,650 40,697 46,875 53,332 61,329 Oper. Expenses (16,510) (19,217) (21,503) (24,781) (28,815) Preprovisions profit 18,748 22,082 25,371 28,550 32,514 Provisions & Allowances (7,336) (7,853) (8,882) (9,715) (11,248) Operating Profits 11,412 14,229 16,489 18,835 21,266 NonOperating Income Exceptionals Pretax Profit 11,466 14,303 16,591 18,916 21,355 Income Tax (2,326) (2,893) (3,401) (3,783) (4,271) Minorities (74) (71) (101) (136) (154) Net Profit 9,067 11,339 13,089 14,997 16,930 Exhibit 9. Balance Sheet Year to 31 Dec (IDRbn) 2015A 2016A 2017F 2018F 2019F Gross Loans 326, , , , ,390 Provisions (12,039) (16,681) (18,684) (21,103) (23,647) Net Loans 314, , , , ,743 Govt. Bonds 47,222 63,006 81,113 65,278 52,551 Securities 9,927 23,765 15,380 24,670 23,688 Other Earnings Assets Total Earnings Assets 446, , , , ,225 Fixed Assets 26,349 28,426 33,640 35,585 41,666 NonEarnings Assets 8,414 9,824 8,663 8,782 8,286 Total Assets 508, , , , ,402 Customer Deposits 353, , , , ,220 Banks Deposits 4,248 9,735 7,321 7,622 8,027 Int. Bearing Liab. Others 417, , , , ,399 Total Liabilities 430, , , , ,399 Share capital & Reserves 34,877 36,359 36,359 36,359 36,359 Retained Earnings 41,538 50,798 60,615 72,613 86,157 Shareholders' Funds 76,415 87,157 96, , ,516 Minority interests 2,023 2,097 2,197 2,333 2,488 Total Equity & Liabilities 508, , , , ,402 See important disclosure at the back of this report 4

5 Exhibit 10. Ratios Year to 31 Dec (%) 2015A 2016A 2017F 2018F 2019F Yield on Earning Assets Cost of funds Interest Spread Net Interest Margin Cost/Income Ratio Oper. Exp./Oper. Gross Inc Gross NPL Ratio LLP/Gross NPL Cost of Credit Loan to Deposit Ratio Loan to Funding Ratio CASA Mix ROAE ROAA CAR Exhibit 11. Dupont and growth Year to 31 Dec 2015A 2016A 2017F 2018F 2019F Dupont PreTax ROAA Tax Retention rate PostTax ROAA Goodwil, Assoc& Min Leverage ROAE Growth (%) Interest Net Interest Income Other Oper. Expenses Fee Based Income PreProvision Oper. Profit Net Profit Shareholders Equity Loan Earnings Asset Deposit Int. Bearing Liab CASA Total Asset Source : BBNI, Danareksa Estimates