Bank Victoria International, Tbk

Transcription

1 Equity Valuation Bank Victoria International, Tbk Primary Report Target Price Low High Banking Property Historical Chart JCI JCI BVIC 3500 BVIC Moderate in Size, But Healthy Source : Bloomberg Stock Information Ticker code IDR BVIC Market price as of May 23, Market price 52 week high 151 Market price 52 week low 115 Market cap 52 week high (bn) 997 Market cap 52 week low (bn) 763 Market Value Added & Market Risk Market Risk MVA Mar-12 Mar-13 Mar-14 Market Value Added Market risk Source : Bloomberg, PEFINDO Equity & Index Valuation Division Shareholders* (%) PT Victoria Investama Tbk Suzanna Tanojo Atrium Asia Investment Management Pte. Ltd 8.82 PT Suryayudha Investindo Cipta 6.32 PT Nata Patindo 3.32 Public (each below 5% of ownerships) *Notes: As of March 31, 2014 Board of Director President Director Deputy CEO Business Director Treasury, FI & Capital Market Director Operation and System Director Compliance Director Eko Rachmansyah Gindo Soewandy Ramon Marlon Runtu Gregorius Andrew Andryanto Haswin Oliver Simorangkir Tamunan Contact: Equity & Index Valuation Division Phone: (6221) info-equityindexvaluation@pefindo.co.id last page is an integral part PT Bank Victoria International Tbk (BVIC) traces its history to 1992 when it was established as a private commercial bank. It was approved by the Ministry of Finance of the Republic Of Indonesia to operate as a commercial bank in In 1997, BVIC obtained a permit from Bank Indonesia to become a Foreign Exchange Trader. BVIC listed its stocks on the stock exchanges in Jakarta and Surabaya in Since then, BVIC has been actively carrying out corporate actions, such as limited public offerings (rights issue) in 2000, 2003, 2006, 2008 and 2011; and bond issuance in 2000, 2007, 2012, and In 2007, BVIC acquired 99.98% of PT Bank Swaguna, which it converted to PT Bank Victoria Syariah in As of March 2014, BVIC had a head office, 5 main branch offices with its latest branch was opened in Surabaya on February 28, 2014, 63 sub-branch offices, and 32 cash offices, strategically located in greater Jakarta area. Page 1 of 16 pages

2 INVESTMENT PARAMETER Solid Industry Despite the slowing down of credit growth, we are of the view that the Indonesia banking industry remains strong. The industry s overall capital adequacy ratio (CAR) and non-performing loan (NPL) ratio stood at 18.36% and 1.9%, respectively, better than the threshold of 8% and 5%. Given these, we believe Indonesia s banking industry will remain strong against the headwinds ahead. Always Be Prudent We are of the view that BVIC has always prioritized caution in channeling its credit. It is based on the fact that BVIC has not entered any unsecured loans, widely known as Kredit Tanpa Agunan (KTA), which have a high degree of risk. In addition, we note that BVIC s risk management division has been able to reduce the percentage of NPLs from 5.03% in 2010 to 1.30% as of March 2014, along with an increase in credit distribution to IDR11.5 trillion. Better Spread We are of the view that BVIC s ability to handle third-party funds and channel it to earning assets is improving. This is based on the fact the average yield of earning assets increased from 9.1% in 2010 to 12.3% in At the same time, its average cost of funds decreased from 7.6% in 2010 to 7.4% in 2013, as BVIC was able to obtain cheaper funds. Business Prospects With the increasing of Bank Indonesia s (BI) rate to 7.5% in November 2013, we estimate that the Indonesia banking industry will face a tougher year in Increasing probability of higher NPLs haunt the industry as a whole. However, we estimate that the industry will still grow by 18% YoY in With solid capital, shown by an average CAR of 18.36%, which is well above the 8% minimum requirement, and a stable low NPL of 1.9% at the end of 2013, we are of the view that Indonesia s banking industry is ready to face the turbulence. Particularly for BVIC, as it now has more experience in attracting funds from third parties, channeling credit as seen with its increasing loan to deposit ratio (LDR), and prudent management, we are of the view that its prospects will remain bright in As a result, we believe that BVIC s interest income will grow by 14.6% in 2014 and 16.6% CAGR during Table 1 : Performance Summary P 2015P Interest income [IDR bn] 851 1,117 1,601 1,835 2,384 Interest expense [IDR bn] (679) (779) (1,124) (1,289) (1,665) Pre-tax profit [IDR bn] Net profit [IDR bn] EPS [IDR] EPS Growth [%] P/E [x] * 1.8* PBV [x] * 0.3* Source: PT Bank Victoria International Tbk., PEFINDO Equity & Index Valuation Division Estimates *) Based on BVIC s share price as of May 23, 2014 IDR125/share Page 2 of 16 pages

3 MACROECONOMY AND INDUSTRY Indonesia s Economic Outlook: New Dawn in 2014 On the November 12, 2013, BI decided to lift its benchmark rate (BI rate) by 25 basis points (bps) to 7.5%, along with the Lending Facility and Deposit Facility rates to 7.5% and 5.75%, respectively. This marked the fifth time BI increased its benchmark rate from a low of 5.75% in May These moves were made to prevent the free fall of Indonesia s economy in 2013 due to the reduction of the quantitative easing program in the United States, and also to narrow the gap of Indonesia s current account deficit. As a result, the growth of Indonesia s economy in 2013 slowed to 5.8% YoY. In 2014, we estimate that household consumption will remain to be the main engine for economic growth, aside from national election activities that will take place until July Therefore, Indonesia s economy is estimated to grow 5.9% YoY in Inflation is expected to hit 5.5%, as consumer demand will ease with the BI rate increase. We expect the IDR to strengthen over the medium term, helped by the election euphoria as well as higher foreign direct investment, domestic interest rates and exports. BI has also initiated several efforts to ease currency volatility, such as by entering bilateral swap agreements amounting to as much as USD25.5 billion to mitigate external shocks ahead. Table 2: Indonesia Economic Indicator P* GDP Growth (%, YoY) Inflation rate (%, YoY) Exchange rate (Rp/USD) BI rate (%) , , , Source: Central Bureau of Statistic, Bank Indonesia, PEFINDO Equity & Index Valuation Division Notes: * PEFINDO Equity & Index Valuation Division Estimates Strong Growth of Indonesia s Banking Industry Having recorded an asset value growth of 18.1% CAGR during , the banking sector remains a promising industry in Indonesia. Banks have been competing vigorously in optimizing third-party funds from customers, particularly in distributing credit. Not only commercial banks, but also rural banks experienced a strong growth in assets during this period. Figure 1: Growth of Commercial & Rural Banks Asset Rp billion 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000-77,376 67,397 55,799 45,742 4,954,467 4,262,587 3,652,832 3,008, Rp, billion 90,000 80,000 70,000 60,000 50,000 40,000 30,000 20,000 10,000 - Commercial bank Rural bank Source: Indonesia Financial Services Authority, PEFINDO Equity & Index Valuation Division Page 3 of 16 pages

4 Improving Liquidity The rising BI Rate were also successfully transmitted to increases in bank interest rates but with a narrower spread between deposit rates and lending rates. Amid rising interest rates, liquidity on the interbank money market increased during fourth quarter of In comparison to the previous quarter, the weighted average transaction volume on the interbank money market in quarter IV 2013 climbed moderately to IDR10.5 trillion from IDR10.1 trillion. Seasonal demand for money at the end of the year, among others, which subsequently drove demand for money on the interbank money market contributed to the surge in transaction volume. On the other hand, such conditions also reduced the average overnight deposit facility (DF) volume to IDR97.83 trillion from IDR trillion in order to meet the increase in demand. Figure 2: Overnight Interbank Market Rates Figure 3: PUAB O/N Rates & Volume Source: Bank Indonesia, PEFINDO Equity & Index Valuation Division Source: Bank Indonesia, PEFINDO Equity & Index Valuation Division Customer Funds Remain in Hand The funding profile of Indonesia s banking industry remains favorable, as reflected by relatively stable of cheaper deposit contributions. At end-july 2013, cheaper deposits from savings and checking accounts each grew by 15.5% YoY and 14.8% YoY, respectively. Both contributed 56.3% towards the total third party funds of the banking industry (figure 5). In terms of customers, contributions from retail customer savings and individual savings remained the primary basis and were relatively stable at around 58%, thanks to the support provided by a wide branch network. Overall, third party savings grew by 14.6% YoY to IDR3,392.9 trilion, which came from rupiah savings that increased 13.2% YoY to IDR2,843.4 trillion and foreign exchange savings that increased 22.3% YoY to IDR549.5 trillion Figure 4: CASA Ratio Source: Bank Indonesia, PEFINDO Equity & Index Valuation Division Notes: * CASA Ratio defined as percentage of both saving and demand deposit to total deposit Page 4 of 16 pages

5 We observe that the effort to increase short-term rupiah reserves within the last several months have been quite aggressive, in addition to consistently building a longer-term funding basis at the same time. Deposit rates with 1-month, 3- month and 24-month tenors have each increased by 28 bps, 23 bps and 27 bps, respectively, compared to the end of the previous year, to 5.87%, 5.99% and 5.74%. On the other hand, interest rates for savings, checking accounts and deposits with 6-month and 12-month tenors only shifted around 9.0 bps to 3.0 bps (figure 6). Figure 5: Interest Rate Movements of Time Deposit of Commercial Banks Source: Bank Indonesia, PEFINDO Equity & Index Valuation Division Credit Expected to Grow More Slowly We expect credit growth to experience slower growth as a number of variables remain unfavorable. Slower economic growth indicates that there have been disruptions in the performance of a number of sectors, especially those oriented to the export market. At the same time, inflation continues to climb to its highest point post the 2008 crisis, which compels the Central Bank to implement tighter monetary policies by raising interest rates. There are also disruptions from external factors such as the low level of commodity prices. In the meantime, the enactment of a number of tighter regulations is also expected to affect credit growth within the short run. Credit growth in 4Q2013 of 21.4% YoY was slower the previous quarter s 23.1% YoY growth. The declining growth was mostly due to working capital credit (48% of total credit), which dropped to 20.4% YoY. The trade sector experienced its slowest growth this quarter, declining from a 35.7% YoY growth in 3Q2013 to 29.3% in 4Q2013. Figure 6: Credit Growth Source: Bank Indonesia, PEFINDO Equity & Index Valuation Divisio Page 5 of 16 pages

6 Capital Remains Solid Amid the slow growth of credit, the capital of banks remains growing and intact. The banking industry s CAR at the end of 2013 of 18.36% remains above the minimum requirement of 8%, and better than the 18.00% in 3Q2013. This reflects the ability of Indonesian banks to withstand the current turbulence, including the pressure from the depreciating rupiah and increasing interest rate. Meanwhile, NPL remains stable at a low of 1.9%. Table 3: General Condition of Indonesian Banks Main indicator Total assets (IDR, 4, ,954.5 tn) Third party funds 3, ,664.0 (IDR, tn) Credit (IDR, tn) 2, ,292.9 CAR (%) NIM (%) ROA (%) Source: Bank Indonesia, PEFINDO Equity & Index Valuation Division Page 6 of 16 pages

7 BUSINESS INFORMATION BVIC s Profile PT Bank Victoria International Tbk (BVIC) is a publicly listed commercial bank established in It started to operate as a commercial bank in 1994 when the permission from Indonesia s Finance Ministry was received. After Bank Indonesia issued it a foreign exchange trading permit in 1997, BVIC is now able to trade foreign currencies. BVIC listed its stocks on Bursa Efek Jakarta and Bursa Efek Surabaya in 1999, which led to several corporate actions, such as limited public offerings (Rights Issue) in 2000, , 2008, and In 2000, BVIC issued its first bond of IDR100 billion, followed by its bond II and sub-ordinated bond I, each with the amount of IDR200 billion in BVIC acquired Bank Swaguna in 2007, and then turned it into Bank Victoria Syariah in BVIC issued another bond (senior bond III and subordinated bond II) in 2012, with amount of IDR200 billion and IDR300 billion, respectively. Recently in 2013, BVIC issued IDR200 billion and IDR300 billion of senior bond IV and sub-ordinated bond III Figure 7: BVIC s Milestones PT Bank Victoria International Tbk was established in Jakarta Obtained permit as a Commercial Bank from Minister of Finance of The Republic of Indonesia Obtained permit as a Foreign Exchange Trader from Bank Indonesia 1999 Listed in Jakarta Stock Exchange and Surabaya Stock Exchange 2007 Acquired PT Bank Swaguna 2010 Convert PT Bank Swaguna into PT Bank Victoria Syariah Source: PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division As of the end of March 2014, BVIC had 5 branch offices, 63 supporting branches, and 32 cashier offices. It also had IDR15.1 trillion in third party funds (excluding deposit from other banks) and IDR11.5 trillion in loans, significantly up from IDR5.7 trillion in third party funds and IDR2.8 trillion in loans as of Tighter Competition and Increasing BI Rate Suppressed the Volume of Cheap Funds We are of the view that BVIC has the ability to attract more third party customers to invest in it. The amount of savings from third parties (which consist of demand deposit, savings account and time deposit) rose from IDR5.7 trillion in 2009 to IDR15.1 trillion as of March This was also followed with an improving CASA ratio (defined as the percentage of saving and demand deposits to total deposit), which rose from 7.9% in 2009 to 15.2% in However, the ratio declined to 11.9% at the end of 2013, and 8.3% as of 1Q14, due to the higher interest rate of BVIC s time deposits to attract customers, and win the tighter competition. last page is an integral part of this report April 16, 2014 Page 7 of 16 pages

8 Figure 8: BVIC Savings & CASA Ratio IDR, tn % 11.9% 10.6% 7.9% 8.3% % M14 Savings (IDR, tn) CASA Ratio (%) % 16.0% 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0% Source: PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division Better Credit Distribution We view BVIC s ability to distribute loans is improving. Its third party savings increased from IDR5.7 trillion of in 2009 to IDR15.1 trillion as of March This was followed with better loan distribution, as the amount of loans being distributed increased from IDR2.8 trillion to IDR11.5 trillion over the same period. Given that its loan to deposit ratio (LDR) has also increased, we believe that BVIC s ability to channel funds is improving. Figure 9: BVIC Savings, Credit and LDR Ratio IDR, tn % 75.88% 67.94% 62.73% 50.36% 39.78% M14 Savings (IDR, tn) Credit (IDR, tn) LDR (%) % 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% Source: PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division Credit Analysts are Performing Well We are of the view that BVIC s ability to manage credit risk is improving. While credit disbursement is increasing, the percentage of non-performing credit (credit categorized as less current, dubious, and non-performing loans) is decreasing. From 5.03% of total credit in 2010, non-performing credit declined to 0.92% of BVIC s total issued credit as of end Page 8 of 16 pages

9 Figure 10: Non-Performing Loan 6.00% 5.00% 5.03% 4.00% 3.00% 2.00% 1.00% 2.38% 2.30% 0.92% 0.00% Categori III - V Source: PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division Getting Closer to its Customers As of September 2013, BVIC had 4 main branches and 62 sub-branches strategically located in greater Jakarta area. With the goal of securing more customers and making it easier to distribute credit, recently BVIC has expanded its network to East Java with the opening of 1 main branch in Surabaya on February 28, In addition to that, BVIC plans to open another 3 branches by the end of The branches will be located in Denpasar, Bandung and Semarang, and will require an estimated IDR66.5 billion. Knowing that adding more branches requires huge capital, BVIC also plans to implement the branchless banking concept, which only requires enhancements to its IT system. Figure 11: Number of BVIC s Branch and Sub- Branch, F Sept' F Number of branch (unit) Number of sub-branch (unit) Source: PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division No Unsecured Loans In distributing its credit, BVIC has always been prudent by securing collaterals with values higher than the loan amount. In addition, BVIC has never entered the unsecured (no collateral) loan business, widely known as Kredit Tanpa Agunan (KTA). We believe that by choosing not to enter this business, BVIC has been able to avoid a high-risk type of credit disbursement. Page 9 of 16 pages

10 FINANCE Continously Booking Revenue Growth Overall, BVIC s interest income from its lending activities continues to improve. On the back of an increasing amount of credit being distributed, BVIC s interest income rose from IDR623 billion in 2010 to IDR1.1 trillion in 2012, a 21.5% CAGR growth. This continued in 2013, with interest income were IDR1.6 trillion, or a 43.3% YoY of increase. We estimate BVIC s interest income to amount to IDR1.84 trillion in 2014 and to grow by 16.6% CAGR during periods. Figure 12: BVIC Interest Income, P 4,000 3,500 3,000 2,500 2,000 1,500 1, ,455 CAGR = 16.6% 3,084 2,648 2,384 1,835 1,601 1, F 2015F 2016F 2017F 2018F Interest income (Rp, bn) Source: PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division Widening Spread Over the last few years, we view that BVIC has been able to widen the spread between the average yield of its earning assets against the average yield of its cost of funds. Its average yield of earning assets was up from 9.1% in 2010 to 12.3% in 2013, while its average cost of funds moves in volatility from 7.6% in 2010 to 7.4% in 2012, due to BVIC s ability to obtain cheaper funds. Therefore, in general, BVIC was able to widen the interest rate spread from 1.5% to 4.9% in Figure 13: BVIC s Average Yield on Interest Earning Assets, Costs of Funds, and Interest Spread 14.0% 12.0% 12.3% 10.0% 9.1% 9.4% 8.5% 8.0% 7.6% 7.4% 6.9% 6.0% 6.3% 4.9% 4.0% 2.2% 2.5% 2.0% 1.5% 0.0% Average yield on earning assets (%) Average costs of funds (%) Spread Source: PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division Page 10 of 16 pages

11 Becoming More Aggressive due to Better Macro Economy Condition Despite the decreasing percentage of NPLs from 5.03% in 2010 to just 0.92% as of 2013, we view that BVIC has taken a slightly aggressive move in lowering its allowance for impairment losses. However, we also view that the same action applies for BVIC peers, due to better macro economy condition. BVIC credit disbursement increased from IDR3.5 trillion in 2010 to IDR11.3 trillion in 2013, while its allowance for impairment losses decreased from IDR335.7 billion to IDR232.6 billion in the same period. We suggest that BVIC increased such allowance in the future in order to avoid a sudden increase of cost for such allowance. Figure 14: BVIC s Credit and Allowance for Impairment Losses, IDR bn Allowance for impairment losses (IDR, bn) Credit (IDR, tn) Source: PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division IDR tn % Figure 15: Percentage of Allowance to Total Credit, % 8.0% 7.0% 6.0% 5.0% 4.0% 3.0% 2.0% 1.0% 0.0% 9.5% 1.91% 0.7% 9.3% 4.2% 4.5% 3.2% 3.7% 1.55% 0.72% 1.0% 0.6% 2.1% 2.7% 0.41% 0.2% Source: Various sources, PEFINDO Equity & Index Valuation Division BVIC MCOR BACA AGRO Getting More Efficient We are of the view that BVIC has the ability to become more efficient. This is based on the fact that its operating cost to operating income ratio, or known as Biaya Operasional terhadap Pendapatan Operasional (BOPO) ratio, shows a decreasing trend. In 2009, BVIC s BOPO was at 92%, and this went down and stabilized at around 76% and 80.4% in 2011 and During 2013, BVIC s BOPO slightly up to 81.6% due to the increasing minimum wages. BVIC s ability to control its cost of funds and to distribute credit with competitive interest rates makes them become more efficient. Figure 16: BVIC s BOPO % 90.00% 80.00% 70.00% 60.00% 50.00% 40.00% 30.00% 20.00% 10.00% 0.00% 91.94% 87.89% 75.84% 80.37% 81.60% BVIC's BOPO Source : PT Bank Victoria International Tbk, PEFINDO Equity & Index Valuation Division Page 11 of 16 pages

12 SWOT ANALYSIS Table 4: SWOT Analysis Strengths Weaknesses Getting more efficient by maintaining its interest spread Strong credit risk analysis No unsecured loans Opportunities Having no ATMs might limit BVIC s ability to attract customers Threats Entering Small Medium Enterprise business Improvement on the Indonesian s welfare Positive growth of Indonesia s economy Interest rate volatility Tight competition in the banking industry Page 12 of 16 pages

13 TARGET PRICE VALUATION Methodology We applied the income approach using Excess Return Method (ERM) as the main valuation approach considering that income growth is a value driver in BVIC instead of asset growth. Furthermore, we also applied the Guideline Company Method (GCM) as a comparison method. This valuation is based on 100% share price as of May 23, 2014, using BVIC s financial report as of March 31, 2014, for our fundamental analysis. Value Estimation We used a Cost of Equity of 11.10% based on the following assumptions: Table 5 : Assumption Risk free rate (%)* 8.04 Risk premium (%)* 3.34 Beta (x)** 0.92 Cost of Equity (%) Source: Bloomberg, PEFINDO Equity & Index Valuation Division Estimates Notes: * As of May 23, 2014 ** Based on PEFINDO Beta Saham report May 22, 2014 Target price for 12 months based on valuation as of May 23, 2014, is as follows: Using the ERM method with a discount rate assumption of 11.10% is IDR458 IDR480 per share. Using the GCM method (PBV 0.76X and P/E 7.94X) is IDR221 IDR397 per share. In order to obtain a value which represents both value indications, we have weighted both ERM and GCM methods by 70%:30%. Based on the above calculation, the target price of BVIC for 12 months is IDR387 IDR455 per share. Table 6: Summary of ERM Method Valuation Conservative Moderate Aggressive Beginning book value of equity 1,708 1,708 1,708 [IDR, bn] PV equity excess return [IDR bn] Terminal Value excess return [IDR, bn] Total Equity Value [IDR bn] 3,040 3,110 3,180 Number of Share, [mn shares] 6,640 6,640 6,640 Fair Value per Share, [IDR] Source: PEFINDO Equity & Index Valuation Division Estimates Page 13 of 16 pages

14 Table 7: GCM Comparison BVIC MCOR INPC BACA AGRO Average Valuation, May 23, 2014 P/E [x] P/BV [x] Source: Bloomberg, PEFINDO Equity & Index Valuation Division Estimates Table 8: Summary of GCM Method Valuation Multiples (x) Est. EPS (IDR) Est. BV/Share (IDR) Value (IDR) P/BV P/E Source: Bloomberg, PEFINDO Equity & Index Valuation Division Estimates Table 9: Fair Value Reconciliation Fair Value per Share [IDR] DCF GCM Average Upper limit Bottom limit Weight 70% 30% Source: PEFINDO Equity & Index Valuation Division Estimates Page 14 of 16 pages

15 Table 10: Consolidated Statement of Comprehensive Income (IDR bn) P 2015P Interest income 851 1,117 1,601 1,835 2,384 Interest expenses (679) (779) (1,124) (1,289) (1,665) Net interest income Other operating income Other operating expenses (48) (188) (269) (216) (244) Income from Operations Pre-tax Profit Tax (52) (47) (67) (83) (108) Net Profit Figure 17: P/E and P/BV P/E P/BV Source: PT Bank Victoria International Tbk., PEFINDO Equity & Index Valuation Division Estimates P/E P/BV Table 11: Consolidated Statement of Financial Position Assets (IDR bn) P 2015P Cash Placement with BI & Other bank 2,703 2,421 4,035 4,937 5,229 Marketable securities 3,208 3,952 3,602 4,088 4,238 Loans 5,559 7,581 11,076 13,091 15,291 Fixed assets Other assets Total Assets 11,803 14,353 19,171 22,733 25,545 Liabilities Demand deposit ,102 1,267 1,521 Saving deposit ,039 Time deposit & Certificate deposit 8,264 9,770 13,328 15,971 17,888 Deposit from other banks ,226 1,539 1,616 Securities issued Other liabilities & accrued Total Liabilities 10,590 12,884 17,527 20,807 23,188 Total Equity 1,212 1,469 1,645 1,921 2,357 Source: PT Bank Victoria International Tbk., PEFINDO Equity & Index Valuation Division Estimates Figure 18: ROA, ROE and TAT ROA, ROE TAT 18.0% % % % % % % % % % TAT (x) ROA (%) ROE (%) Source: PT Bank Victoria International Tbk., PEFINDO Equity & Index Valuation Division Estimates Table 12: Key Ratios Ratio P 2015P Growth [%] Interest income Total income (10.2) Operating Profit Source: PT Bank Victoria International Tbk., PEFINDO Equity & Index Valuation Division Estimates Net Profit Profitability [%] Operating margin Net Margin ROA ROE Other ratio BOPO LDR CASA Source: PT Bank Victoria International Tbk. PEFINDO Equity & Index Valuation Division Estimates Page 15 of 16 pages

16 DISCLAIMER This report was prepared based on trusted and reliable sources. Nevertheless, we do not guarantee its completeness, accuracy and adequacy. Therefore, we are not responsible for any investment decisions made based on this report. All assumptions, opinions and predictions were solely our intern al judgments as of the reporting date, and those judgments are subject to change without further notice. We are not responsible for any mistakes or negligence that occur by using this report. Recent performance cannot always be used as a reference for future outcome. This report does not offer a recommendation to purchase or hold particular shares. This report might not be suitable for some investors. All opinions in this report have been presented fairly as of the issuing date with good intentions; howeve r, they could change at any time without further notice. The price, value or income of each share of the Company stated in this report might be lower than investor expectations, and investors may obtain returns lower than the invested amount. Investment is defined as the probable income that will be received in the future; nonetheless such returns may fluctuate. As for companies whose shares are denominated in a currency other than Rupiah, foreign exchange fluctuation may reduce their share value, price or the returns for investors. This report does not contain any information for tax considerations in investment decision - making. The share price target in this report is a fundamental value, not a fair market value or a transaction price reference required by regulations. The share price target issued by the PEFINDO Equity & Index Valuation Division is not a recommendation to buy, sell or hold particular shares. It should not be considered as investment advice from the PEFINDO Equity & Index Valuation Division and its scope of service to some parties, including listed companies, financial advisors, brokers, investment banks, financial institutions and intermediaries, does not correlate with receiving rewards or any other benefits from such parties. This report is not intended for any particular investor and cannot be used as part of an objective investment analysis of particular shares, an investment recommendation, or an investment strategy. We strongly recommend investors to consider the suitability of the situation and conditions before making a decision in relation with the figures in this report. If necessary, consult with your financial advisor. PEFINDO keeps the activities of the Equity Valuation Division separate from its Ratings Division to preserve the independence and objectivity of its analytical processes and products. PEFINDO has established policies and procedures to maintain the confidentiality of non -public information received in connection with each analytical process. The entire process, methodology and the database used in the preparation of the Reference Share Price Target Report as a whole are different from the processes, methodologies and databases used by PEFINDO in issuing ratings. This report was prepared and composed by the PEFINDO Equity & Index Valuation Division with the objective of enhancing the transparency of share prices of listed companies in the Indonesia Stock Exchange (IDX). This report is also free of influence from any other party, including pressure or force either from IDX or the listed company reviewed. PEFINDO Equity & Index Valuation Division earns a reward amounting to IDR40 million from reviewed company for issuing this report twice a year. For further information, please visit our website at This report was prepared and composed by the PEFINDO Equity & Index Valuation Division. In Indonesia, this report is published in our website and in the IDX website Page 16 of 16 pages