1H23 Result: Earnings in line, solid core performance
Key Takeaways:
▪️1H23 BBCA posted a net profit of IDR24.2 tn (+34% YoY), primarily driven by strong net interest income (NII) and lower provision expenses. Meanwhile, PPOP grew +22.1% YoY to IDR31.7 tn in 1H23, mainly driven by solid NIM improvement and steady non-interest income growth.
▪️Consumer loans recorded the highest growth (+13.9% YoY/ +4.8%QoQ) supported by a 12.0% YoY growth in mortgages (BCA Expoversary event). NIM increased 60bps to 5.6% in 1H23 (vs 5.0% in 1H22) due to steady cost of fund and improvement on asset yield.
▪️CASA grew +5.7% YoY to IDR864.7 tn in 1H23. CASA ratio was stable at 80.7% (vs 81.6% in FY22).
▪️Meanwhile, NPL decline 30bps to 1.9% in 1H23 (vs 2.2% in 1H22). Restructured loans gradually recovered and returned to normal payment terms, as shown by a decline in loan at risk (LAR) ratio to 8.7% in 1H23, down from 12.3% in 1H22.
▪️We transfer our banking coverage from Tirta Widi Gilang to Victoria Venny. We think that BBCA share price has already fairly valued thus maintain a HOLD rating, with our DDM-TP of IDR9,900/share implying 4.4x of FY24F PBV (7.0% of COE).
▪️Management FY23F guidance: 1) 10-12% of loan growth; 2) 5.5%-5.6% of NIM; 3) 1.9%-2.0% of NPL ratio; 4) 8%-9% LAR ratio.
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