Good morning,
Bank Negara
Indonesia – 1H17 Results Are Within Expectations
BNI’s 1H17 results
were broadly in line with our estimates. Net profit grew 46.7% YoY, due to strong
non-interest income growth, manageable operating expenses and lower credit
costs. Yet, its NIM slipped to 5.6% due to its loan mixture being rebalanced
towards a lower loan yield segment (ie corporate SOEs), which we had already
expected. Meanwhile, its gross NPL ratio reached 2.8% (Jun 2016: 3%), along
with a higher LLC ratio. This should be an indication that asset quality
would gradually improve in the following quarters. Maintain BUY, with an
unchanged GGM-derived TP of IDR7,700 (12% upside).
¨ Bank
Negara Indonesia held an analyst briefing and released its 1H17 results. Key highlights
are:
i. Net profit of
IDR6.4trn (+46.7% YoY, -1.2% QoQ), compared with earnings of IDR3.23trn in
1Q17.
This made up 47.7% of our (IDR13.45trn) and
49% of consensus (IDR13trn) forecasts for the full year. The results are
broadly within expectations, as we had anticipated earnings to improve in
2H17;
ii. Operating income
grew 14.1% YoY. This was due to a 23.2% YoY surge in non-interest income
which, in turn, mainly stemmed from net premium and recovery incomes growing
21.4% and 66% YoY respectively;
iii. NIM fell by c.50bps
YoY to 5.6%, due to loan yield being compressed by c.90bps to 10%. This was
the result of its loan mixture being rebalanced to having a higher portion of
corporate state-owned enterprise (SOE) loans. SOE loans accounted for 20% of
BNI’s total loans as of June;
iv. CASA deposits
reached 60.9% of customer deposits as of June. The bank’s blended cost of
funds (CoF) dipped to 3% (1H16: 3.1%) as it repriced down its time deposits
(TD) rate to 5.5% (1H16: 6%). BNI also continued to push its institutional
current accounts through cash management, while growing its individual
savings accounts by payroll.
v. Operating expenses
remained manageable, growing 11.3% YoY. This brought its CIR down to 45.1%,
from 46.2% in 1H16;
vi. Annualised credit
cost was significantly down to 190bps (1H16: 277bps) with the portion of
restructured loans to total loan book decreasing to 7.1% (1H16: 8.4%). This
was also largely due to a IDR1.2trn write-off of Trikomsel Oke’s (TRIO IJ,
NR) loan. Going forward, we expect no further major downgrades to its NPL
estimate. BNI’s management maintained its credit cost guidance of 180bps for
FY17F, which is lower than our forecast of 202bps;
vii. Annualised ROAE was
14.2%, in line with our expectation of 14.7%;
viii. Capital level was
sufficient, with a 19% capital adequacy ratio to support further business
expansion going forward (Dec 2016: 19.4%).
¨ We expect BNI to
continue focusing on providing loans for infrastructure-related projects despite the lower
loan yield. To reduce the further NIM decline, its funding structure would be
a key factor. As such, BNI would continue to push CASA deposits for both its
institutional and individual accounts. Meanwhile, we expect the improvement
in asset quality to be more gradual, coupled with an increase in its LLC
ratio. We also assume no major corporate loans would be downgraded to NPL
status going forward. (Eka Savitri)
Link
to report:
Bank Negara Indonesia : 1H17 Results Are Within Expectations
Link
to daily report: Indonesia Morning Cuppa 130717
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Company Update:
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Bumi Serpong Damai
(BSDE IJ, BUY, TP IDR 2,650): Flat 6M17 presales
Bumi Serpong posted
flat 6M17 presales of IDR2,519bn (-1% YoY) or equivalent to 35% of this
year’s target of IDR7,225bn. Presales in 2Q17 slumped 31% YoY due to lower
sales of landlots, strata title, and industrials. In terms of product mix,
housing contributed 42% followed by landlots 5%, strata title 7%, shophouses
13%, and land plots (JV) 33%.
We maintain our view
that 2017 would be a more positive year for the sector as well as for BSD. We
maintain our BUY call on the back of a 25% CAGR net profit growth forecast
from FY16-19F as well as expectations on sector improvements starting from
this year. Currently, the counter is trading at 13.5x 2017F P/E and a 66%
discount to RNAV. (Yualdo Tirtakencana)
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Media Highlights:
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Corporate
Retail Sales Survey in May 2017 Holding Up
Ministry of Finance targets 16% tax-to-GDP
ratio by 2019
XL Axiata allocates IDR1.2trn for central
region expansion
Kalbe Farma plans expansion in ASEAN
countries
Mark Dynamics aims production to reach
420,000 units per month
CIMB Niaga issues IDR1tn bond
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Our
Recent Publication:
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Sector Update: Plantation – Cautious Mode
On
Link to report: Plantation:
Cautious Mode On
|
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Company Update: Bank Negara Indonesia –
Gaining Momentum
Link to report: Bank
Negara Indonesia : Gaining Momentum
|
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Strategy: Smoother Homecoming
Link to report: Indonesia
Strategy: Smoother Homecoming
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Sector Update: Coal Mining – China’s Hydropower Capacity Cut – a
Potential Upside
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Economics Update: M2 Growth Continues Uptrend, Loan
Growth Moderates
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Sector Update: Food & Beverage Products
– Potential Impact Of Recent Wheat Price Jump
Link to report: Potential
Impact Of Recent Wheat Price Jump
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Sector Update: Retailing – Back To School
After The Lebaran Holidays
Link to report: Back
To School After The Lebaran Holidays
|
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Economics Update: June Inflation Inches Up Amid
Aidilfitri Festivities
Link to report: June
Inflation Inches Up Amid Aidilfitri Festivities
|
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Economics Update: Growth To Strengthen In
2H On Resilient Domestic Demand
Link to report: Growth
To Strengthen In 2H On Resilient Domestic Demand
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Company Update: Semen Indonesia – ASP Sees a Slower Reduction In May
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Best regards,
Helmy Kristanto
Director
Head of Indonesia Research
PT RHB Sekuritas Indonesia
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