Company Update / Banks / IJ / Click here for full PDF version
Author(s): Jovent Muliadi ;Anthony
- 9M24 net profit of Rp42tr (+8% yoy/+12% qoq) came in-line at 75% of our/cons' forecast. PPOP growth was decent at +7% yoy (+5% qoq).
- Resilient asset quality resulted in lower LAR of 7.5% (vs. 9.8/7.8% in 3Q23/2Q24) which prompting CoC revision to <=1% from 1-1.2%.
- remains as our top pick along with . Maintain Buy.
9M24 results: in-line with decent PPOP coupled with lower CoC
posted 9M24 net profit of Rp42tr (+8% yoy/+12% qoq) and came in-line at 75% of our/consensus FY24F estimates. PPOP growth was decent at +7% yoy/+5% qoq as NII (+4% yoy/+3% qoq) and non-II growth (+11% yoy/qoq) was complemented with benign opex (+4% yoy/+6% qoq). Provision slightly increased by +4% yoy but decreased by -21% qoq which translated to CoC of 0.9% in 9M24 lower than initial guidance of 1.0-1.2% amid continuous improvement in asset quality.
Slight NIM drop is a short-term consequences of market share focus which shall be paying off in the mid-term
Bank-only NIM saw a -20bp qoq contraction to 4.9% on the back of lower loan yield (-6bp qoq) and higher CoF (+16bp qoq) as it continued to ramp-up loan market share during tight liquidity condition.We like this strategy as it shall enable them to cherry-pick good wholesale names; this shall not be possible during ample liquidity condition. As such we think this only as short-term consequences and will pay-off in the mid-term.However, consolidated NIM remain stable qoq at 5.1% and came in-line with guidance of 5.0-5.3% supported by its subsidiaries. deposit growth continue to be the highest at +15% yoy/+1% qoq compared to other big banks at +4% yoy/-1% qoqsupported by both (+15% yoy/-1% qoq) and TD (+14% yoy/+6% qoq).
Loan growth continued its strong momentum
Overall loan growth continued its momentum growing by +21% yoy/+4% qoq which coming from all segment but largely driven by corporate (+29% yoy/+3% qoq). However, the management conservatively kept loan growth guidance unchanged at +16-18% as it expect corporate loan to slightly normalise amid high base effect in 4Q23.
Resilient asset quality prompting lower CoC guidance
Asset quality sequentially improved with consolidated NPL now stood at 1.1% (vs. 1.5/1.2% in 3Q23/2Q24) and LAR at 7.5% in 3Q24 (9.8/7.8% in 3Q23/2Q24), second to BCA's 6.1%. Note that this LAR also lower than pre-Covid level of 9% Meanwhile LAR coverage stood at 43% in 3Q24 still above management comfortable level of 41-42%. This has prompting the management to revise its FY24F CoC to <=1% in FY24F from 1.0-1.2% initially.
Maintain Buy as the bank continued to deliver superior ROA/ROE
We continue to like amid its robust loan and growth on top of resilient asset quality. is currently trading at 2.0x FY25F P/B (vs. 10Y average of 1.7x) and 10.1x FY25F P/E (vs. 10Y average of 11.9x). Risk to our call is worsening liquidity and slower loan growth.
Sumber : IPS