Solid Earnings yet Already Priced In
FY21 Result : Above Expectation
• BBCA booked attributable net profit of IDR31.42tn in FY21 (106.7% MNCS estimate) or increasing 15.8% YoY.
• The increase in BBCA’s bottom line primarily driven by higher net interest income and lower provisioning expense.
• BBCA’s net interest income grew 3.5% YoY to IDR56.47tn in FY21 (vs IDR54.55tn in FY20) on the back of lower CoF despite lowering interest earning asset.
• Strengthening CASA (+19.1% YoY) helped CoF to decline 40 bps YoY. However loan yield dropped twice as fast as CoF amid lower interest rate environment causing NIM to squeeze to 5.1% in FY21 (vs 5.7% in FY20).
• Non-interest income rose 6.0% YoY and was attributable to strong fees and commission related to mobile and internet banking transaction.
• BBCA’s loan expanded 8.2% YoY following the recovery of corporate segment (+12.3% YoY) that contributed to 43.2% from total outstanding loan.
• Total restructured loan including Covid-19 dropped 420 bps YoY to 14.6% in FY21 (vs 18.8% in FY20).
• NPL increased to 2.2% during the same period (vs 1.8% in FY20), yet improving from 2.4% in 1H21. Along with improving asset quality, BBCA’s CoC fell 10 bps to 1.6% last year (vs 1.7% in FY20).
ESG Focus : Financing Sustainability & Delivering Social Impact
• BBCA’s total sustainable finance portfolio (SFP) reached IDR154.4tn (+20.9% YoY/24.8% of total loan).
• Micro & SME SFP increased 14.3% YoY to IDR88.2tn while non-Micro & SME SFP grew 31.1% to IDR66.2tn in FY21.
• BBCA also set aside IDR136.2bn fund for social impact initiative by establishing 70 vaccination centers in collaboration with government and partners.
• Of IDR37.1bn was allocated for Covid-19 assistance by distributing 1) >238k doses vaccine; 2) ~40.6k surgical gown; 3) >20mn surgical masks and 4) thousands antigen kit and other PPEs.
• As the largest constituent of iShares MSCI Indonesia ETF (EIDO), BBCA was rated ‘A’ for ESG initiatives in Nov-21.
Outlook & Recommendation : Maintain HOLD with Upgraded TP : IDR7,900
We are optimistic for BBCA’s performance in FY22F. We believe BBCA’s loan could grow 8.0-10% YoY on the back of BBCA’s ample liquidity (LDR<70%). We also expect BBCA could maintain NIM at 5.0-5.2% on the back of stable CoF driven by its strong CASA growth and structure. In addition, BBCA aspires to cut back CoC to 0.8-1.0% in FY22F, which we believe is achievable given adequate provisioning and improving asset quality going forward. All in all we see BBCA’s performance to remain solid in FY22F. However, share price has rallied since the stock split. Using DDM valuation, we maintain HOLD rating for BBCA with upgraded TP to IDR7,900 (vs IDR7,200 previously) or implying 4.3x FY22F PBV. Key risk to our call include 1) lower than expected loan growth and 2) unfavorable economic condition due to 3 rd wave Covid-19 that may deteriorate asset quality.
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