Equity Research //Result Update
Bank negara indonesia
HOLD
No Major Changes
In spite of BBNI having put in place a new management team, no major strategy changes are reportedly contemplated, going forward. If indeed the reformed BBNI management team intends to follow policies of its predecessor, we shall maintain our price target at IDR6,700, allowing us to assign a HOLD recommendation for BBNI. BBNI currently trades at 1.4x and 1.2x of PBV in 2015F and 2016F.
Seasonally slow in early ??
Even though BBNI’s net profit has grown a yearly basis by 17.7% YoY, on a quarterly basis net profit has dropped by 11.2% qoq, as a seasonal phenomenon, as anticipated by management. However, BBNI’s net profit has only achieved by 21.3% of our 2015F net profit target of IDR13.2 tn.
Higher contribution interest income from loans
The increase in net profit on a yearly basis (as mentioned above) has been tracked by higher interest income. We see 1Q15 interest income from loans was higher compared to 1Q14, due to higher average yields on loans. Going forward we believe that BBNI’s interest income from loans will continue as one of their earning assets.
Loans and their quality
Going forward, BBNI will pay more attention and increase focus on three segments, specifically Corporate, Middle & Small and Consumer. However, most investors are concerned about its increase in Medium segment pre NPL ratio which stood at 6.5% in 1Q15. Based on management guidance, they are not worried about this because one of its three debtors has higher collateral than loan value. In addition, the value of pre NPL is approximately IDR3.0 tn.
Feasibility study for new program introduced by FSA
Andy wibowo gunawan
[email protected] +62 21 299 60 703
4th May 2015
Indonesia Banking Current Price Price target Upside potential (%)
IDR6,425 IDR6,700 4.28
Stock Data Bloomberg Ticker BBNI IJ Equity Outstanding share (tn) 18.65 Market Cap (USD bn) 9.27 52 week range (Rp) 4,710-7,275 6M Avg Value(Rp bn) 144.1 YTD Returns (%) 6.1 Beta (x) 1.4
To secure low-cost funds, BBNI is currently engaged in a feasibility study and calculating its risks about the LAKU PANDAI program, as this program is using agents to round up third party funds. Note that BBRI, BMRI, BTPN and BBCA have all been approved by FSA to implement this program which, if run properly, will make our banking industry more efficient as it is branchless.
Major Shareholders (%) Government 60.0 Public 40.0
Maintained price target
Share Price Performance 7,500
Despite its bottom-line achievement being slightly below with our target, we still maintain our 2015F net profit target, as we see BBNI’s net profit slowing in early quarter, while we are optimistic it will be higher the next quarter. Moreover, our 2015F price target at IDR6,700.
Key Investment Mectric 2013
2014
2015F
2016F
2017F
33,365
35,003
40,716
50,013
Net Profit (IDR bn)
9,054
10,783
13,251
16,700
21,196
NIM
5.6%
6.0%
6.6%
7.2%
7.9%
ROE
19.0%
14.3%
16.0%
17.2%
18.4%
2.9%
1.4%
1.7%
2.1%
2.7%
PE (x)
8.1
10.6
9.0
7.2
5.7
PBV (x)
1.5
1.5
1.4
1.2
1.0
Dividend Yield
5,500
4,500
26,451
Interest Income (IDR bn)
6,500
3,500 Jan-14
Apr-14
Jul-14
Oct-14
Share Performance (%) Month Absolute 3m 4.9 6m 10.2 12m 36.2
Jan-15
Apr-15
Relative 2.9 10.5 26.8
Please see the back page for rating definition, analysts certification, and important disclosure
1
Figure 1: Quarterly Net Profit
Figure 2: Interest Income Portfolio Trends
IDR bn
95.0%
3,500.0
85.0%
5.2%
4.9%
4.3%
4.3%
8.4%
7.8%
6.8%
7.0%
82.5%
85.3%
85.7%
85.7%
87.0%
2012
2013
2014
1Q14
1Q15
6.8% 9.5%
75.0%
3,000.0
65.0% 2,500.0
55.0% 45.0%
2,000.0
35.0% 25.0%
1,500.0 2,069.0
2,209.0
2,258.0
2,518.0
2,393.0
2,543.0
2,675.0
3,172.0
2,817.0
1Q13
2Q13
3Q13
4Q13
1Q14
2Q14
3Q14
4Q14
1Q15
1,000.0
Figure 3: Loan Yield and Cost of Fund 12.0%
10.0%
3.2%
Loan
10.2%
11.2%
10.9%
3.3% 3.1%
7.0%
6.5%
6.0%
2.9%
2.8%
2.7%
Government Bonds
Figure 4: Pre NPL Ratio Trends 3.2%
10.6%
9.0%
5.0%
Source: Company
Source: Company
11.0%
15.0%
10.2%
2.7%
5.0%
2.5%
2.4%
4.0%
2.3%
8.0%
2.1%
7.0%
3.0% 2.9%
1.9%
2.7%
2.0%
6.0%
1.7%
5.0%
1.5% 2012
Source: Company
2013
2014
Average Yield on Loan
1Q14
1Q15
Cost of Fund
2012
Source: Company
Figure 5: BBNI’s NPL Movement 1.313
2.0% 1.0% 2013 Corporate
2014 Small
1Q14 Consumer
1Q15
Medium
Figure 6: CASA in 1Q15
859 5.430
5.151
Current Account, 26.0% Time Deposit, 37.0%
Saving, 37.0%
Beginning
Source: Company
Downgrade
Write Off
Ending Balance
Source: Company
Please see the back page for rating definition, analysts certification, and important disclosure
2
Figure 7: PE Band
Figure 8: PBV Band
18.0
2.5
16.0 +2 ST. Dev
14.0
+2 ST. Dev
2.0
+1 ST.Dev
+1 ST.Dev
12.0 Mean 10.0
Mean
1.5
-1 ST.Dev
-1 ST.Dev
8.0
-2 ST. Dev
-2 ST. Dev 1.0 Jan-11
6.0 Jan-11
Jan-12
Jan-13
Jan-14
Jan-15
Jan-16
Figure 9: Bloomberg Rating Consensus 6.2% 25.0%
6.2% 25.0%
3.3%
6.2%
36.7%
36.4%
80.0%
6.0%
31.3%
6.0%
36.4%
100.0%
Jan-12
Jan-13
Jan-14
Jan-15
Source: Bloomberg
Source: Bloomberg
Figure 10: Valuation Map Rp7,500
4.5 4.0
Rp7,000
BBCA
3.5 3.0
60.0%
68.8%
68.8%
60.0%
20.0%
57.6%
57.6%
40.0%
62.5%
Rp6,500
0.0% Dec-14 BUY
Jan-15 Feb-15 Mar-15 Apr-15 HOLD SELL Price
BBRI BMRI
BBNI
2.0 Rp6,000
Rp5,500 Nov-14
2.5
1.5
BDMN
1.0
BJBR
BJTM
BBTN
0.5 5%
10%
15%
20%
25%
Source: Bloomberg
Source: Bloomberg
Figure 11: Net Value by Brokerage Ytd
Figure 12: Net Value by Brokerage YoY
30%
CG, 18.2%
CG, 23.2%
Others, 23.3%
Others, 25.5%
CS, 12.4%
IF, 4.8%
DX, 5.5%
ML, 11.9% DX, 5.9%
BK, 8.7%
ML, 10.7%
RX, 9.5% RX, 9.0%
Source: Bloomberg
FG, 10.0%
BK, 11.0% FG, 10.4%
Source: Bloomberg
Please see the back page for rating definition, analysts certification, and important disclosure
3
Table 1: 3M15 Result Balance Sheet (IDR bn)
3M14
3M15
YoY
4Q14
1Q15
QoQ
Placement With Other Banks & BI
11,701
17,247
47.4%
14,530
17,247
18.7%
29,061
59.3%
Marketable Securities
13,579
11,531 -15.1%
12,743
11,531
-9.5%
12,284
93.9%
Government Bonds
42,322
44,589
5.4%
43,830
44,589
1.7%
48,331
92.3%
247,120
269,513
9.1%
277,622
269,513
-2.9%
322,943
83.5%
Corporate
67,973
72,948
7.3%
72,874
72,948
0.1%
87,410
83.5%
SoE
42,221
40,594
-3.9%
46,841
40,594 -13.3%
48,642
83.5%
Medium
31,078
39,456
27.0%
40,324
39,456
-2.2%
47,278
83.5%
Small
38,821
37,948
-2.2%
40,374
37,948
-6.0%
45,471
83.5%
Consumer
47,453
52,527
10.7%
47,453
52,527
10.7%
62,940
83.5%
143,915
163,742
13.8%
29,756
163,742 450.3%
196,203
83.5%
Total Assets
371,461
407,215
9.6%
416,574
407,215
-2.2%
461,534
88.2%
Customer Deposits
273,966
305,150
11.4%
313,893
305,150
-2.8%
322,943
94.5%
Deposits From Other Banks
3,750
3,494
-6.8%
3,177
3,494
10.0%
4,067
85.9%
Marketable Securities Issued
5,638
6,504
15.4%
6,158
6,504
5.6%
10,257
63.4%
8,922 -42.1%
11,212
8,922 -20.4%
22,272
40.1% 74.8%
Loans
Others
2015F % AZ Est.
Borrowings
15,409
Equity
51,121
61,862
21.0%
61,021
61,862
1.4%
82,758
3M14
3M15
YoY
4Q14
1Q15
QoQ
2015F % AZ Est.
Net Interest Income
5,289
6,096
15.3%
5,982
6,096
1.9%
27,323
22.3%
Operating Income
7,663
9,035
17.9%
9,407
9,035
-4.0%
35,941
25.1%
(3,447)
(4,229)
22.7%
(4,906)
(4,229) -13.8%
(16,428)
25.7%
4,216
4,806
14.0%
4,501
6.8%
39,036
12.3%
(1,233)
(1,241)
0.6%
(334)
(1,241) 271.6%
(3,096)
40.1%
Net Profit
2,393
2,817
17.7%
3,172
2,817 -11.2%
13,251
21.3%
Ratios
3M14
3M15
YoY
4Q14
1Q15
QoQ
2015F % AZ Est.
NIM
6.1%
6.5%
0.4%
6.2%
6.5%
0.3%
6.6%
-0.1%
ROA
3.3%
3.6%
0.3%
3.5%
3.6%
0.1%
2.9%
0.7%
ROE
22.6%
23.1%
0.5%
23.6%
23.1%
-0.5%
16.0%
7.1%
Cost to Income
39.8%
39.8%
0.0%
43.9%
39.8%
-4.1%
53.4%
-13.6%
BOPO
7.9%
Income Statements (IDR bn)
Operating Expenses Pre-Provision Income Provisioning
4,806
69.2%
70.6%
1.4%
69.8%
70.6%
0.8%
62.7%
NPL
2.3%
2.1%
-0.2%
2.0%
2.1%
0.1%
2.0%
0.1%
LDR
88.4%
87.8%
-0.6%
87.8%
87.8%
0.0%
96.6%
-8.8%
CAR
15.6%
17.8%
2.2%
16.2%
17.8%
1.6%
23.1%
-5.3%
Source: Company, Sucorinvest
Please see the back page for rating definition, analysts certification, and important disclosure
4
Financial Summary Income Statements (IDR bn)
2013
2014
2015F
2016F
2017F
26,451
33,365
35,003
40,716
50,013
Interest Expenses
(7,392)
(10,989)
(7,680)
(7,166)
(8,145)
Net Interest Income
19,058
22,376
27,323
33,550
41,869
9,441
10,715
8,618
8,827
9,065
Fees
4,000
5,027
3,445
3,657
3,857
Others
5,441
5,688
5,173
5,171
5,208
(14,573)
(16,103)
(16,428)
(19,024)
(22,359)
G&A
(4,540)
(5,091)
(4,844)
(5,462)
(7,058)
Salary
(6,084)
(6,781)
(8,074)
(10,195)
(11,625)
Others
Interest Income
Other Operating Income
Other Operating Expenses
(3,949)
(4,232)
(3,510)
(3,367)
(3,676)
Operating Profit
11,219
13,346
16,417
20,723
26,338
Profit Before Tax
11,278
13,524
16,613
20,938
26,575
Net Profit
9,054
10,783
13,251
16,700
21,196
Balance Sheet (IDR bn)
2013
2014
2015F
2016F
2017F
Cash
10,090
11,436
11,032
12,900
13,050
Current Account with BI
23,130
24,598
16,147
18,206
8,304
4,102
4,496
3,875
4,369
4,982
Placement with BI & Others
23,473
14,527
29,061
18,203
16,605
Marketable Securities
11,966
12,738
12,284
13,850
15,793
Gross Loans
250,638
277,622
322,943
378,683
448,398
Allowances
(6,880)
(6,970)
(11,113)
(13,031)
(15,430)
243,758
270,652
311,830
365,652
432,969
41,432
43,830
48,331
54,493
62,136
Fixed Asset
5,514
6,222
5,755
6,489
7,399
Other Assets
23,191
28,075
23,218
23,206
25,992
Total Assets
386,655
416,574
461,534
517,369
587,229
Customer Deposits
291,890
300,265
322,943
364,118
415,183
Current Account
88,079
82,743
93,653
105,594
120,403
Saving Account
111,735
114,970
129,177
145,647
166,073
92,076
102,552
100,112
112,877
128,707
6,037
6,158
10,257
9,586
8,685 19,308
Current Account with Other Banks
Nett Government Bonds
Time Deposit Marketable Sec. Issued Borrowings
18,951
11,212
22,272
20,737
Other Liabilities
22,094
23,514
23,304
25,874
28,886
Total Liabilities
338,971
341,149
378,776
420,315
472,062
47,684
75,425
82,758
97,054
115,167
2013
2014
2015F
2016F
2017F
Loan Growth
24.9%
10.8%
16.3%
17.3%
18.4%
Deposit Growth
13.3%
2.9%
7.6%
12.8%
14.0%
NII Growth
23.3%
17.4%
22.1%
22.8%
24.8%
Net Profit Growth
28.5%
19.1%
22.9%
26.0%
26.9%
LDR
83.5%
90.1%
96.6%
100.4%
104.3%
2.2%
1.7%
2.0%
2.0%
2.0%
CASA
68.5%
65.8%
69.0%
69.0%
69.0%
CAR
15.1%
16.2%
23.1%
24.1%
25.2%
Expenses Ratio
72.1%
70.6%
62.7%
59.0%
56.6%
Cost to Income Ratio
48.9%
Total Equity Financial Ratios
Gross NPL
63.2%
58.8%
53.4%
51.1%
ROA
2.3%
2.6%
2.9%
3.2%
3.6%
ROE
19.0%
14.3%
16.0%
17.2%
18.4%
Please see the back page for rating definition, analysts certification, and important disclosure
5
Sucorinvest, rating definition, analysts certification, and important disclosure Ratings for Sectors Overweight : We expect the industry to perform better than the primary market index (JCI) over the next 12 months. Neutral : We expect the industry to perform in line with the primary market index (JCI) over the next 12 months. Underweight : We expect the industry to underperform the primary market index (JCI) over the next 12 months.
Ratings for Stocks Buy Hold Sell
: We expect this stock to give return (excluding dividend) of above 10% over the next 12 months. : We expect this stock to give return of between -10% and 10% over the next 12 months. : We expect this stock to give return of -10% or lower over the next 12 months.
Analyst Certification The research analyst(s) primarily responsible for the preparation of this research report hereby certify that all of the views expressed in this research report accurately reflect their personal views about any and all of the subject securities or issuers. The research analyst(s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendations or views expressed in this research report.
Disclaimers This document has been prepared for general circulation based on information obtained from sources believed to be reliable but we do not make any representations as to its accuracy or completeness. PT Sucorinvest Central Gani accepts no liability whatsoever for any direct or consequential loss arising from any use of this document or any solicitations of an offer to buy or sell any securities. PT Sucorinvest Central Gani and its directors, officials and/or employees may have positions in, and may effect transactions in securities mentioned herein from time to time in the open market or otherwise, and may receive brokerage fees or act as principal or agent in dealings with respect to these companies. PT Sucorinvest Central Gani may also seek investment banking business with companies covered in its research reports. As a result investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision.
Please see the back page for rating definition, analysts certification, and important disclosure
6
Sales office & research PT Sucorinvest Central Gani
Head Office PT. Sucorinvest Central Gani Equity Tower, 31st Floor Jl. Jend Sudirman Kav. 52-53 Jakarta 12190 – Indonesia Ph : (+62-21) 2996 0999 Fax : (+62-21) 5797 3938 JAKARTA Equity Tower, 31st Floor Jl. Jend Sudirman Kav. 52-53 Jakarta 12190 – Indonesia Ph : (+62-21) 2996 0999 Fax : (+62-21) 5797 3938 Ruko Pluit Village (Mega Mall Pluit) no. 30 Jl. Pluit Indah Raya, Jakarta Utara 14450 Ph: (+62-21) 6660 7599 (+62-21) 6660 7607 Fax: (+62-21) 6660 7610 Ruko Mangga Dua Square Blok F no. 39 Jl. Gunung Sahari Raya, Jakarta Utara 14420 Ph: (+62-21) 2961 8899 Fax: (+62-21) 2938 3525 Wisma 77 Lt.17 Jl. Letjend S. Parman Jakarta Barat 11410 Ph: (+62-21) 536 3033 Fax: (+62-21) 5366 2966 Ruko Inkopal Block A No. 23 A Jl. Boulevard Barat Raya Jakarta Utara 14240 Ph: (+62-21) 4585 9114 Fax: (+62-21) 4585 9227 Ruko Puri Niaga 1 Blok K7 / 3T Jl. Puri Kencana Jakarta Barat 14240 Ph: (+62-21) 582 3117 Fax: (+62-21) 582 3118
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Research Email 1. Maxi Liesyaputra Head of Research
[email protected] 2. Andy Wibowo Gunawan Equity Analyst
[email protected] 3. Vasthi Juwita Permata E Equity Analyst
[email protected] 4. Inav Haria Chandra Equity Analyst
[email protected] 5. Jefrix Kosiady Equity Analyst
[email protected] 6. Achmad Yaki Y Technical Analyst
[email protected]
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7
