BBNI's Mixed Bag, a Tale of Two Halves
Key Takeaways:
▪️Net profit grew by +3.2% YoY in 7M24, driven by lower credit costs and strong non-interest income. NIM reached 4.6% in Jul-24, but NIM guidance for FY24E was revised down to ≥4% YoY from ≥4.5%.
▪️Loan growth reached 11.1% YoY in 7M24, surpassing expectations. This led to an upward revision of FY24F loan growth guidance to 10%-12%, driven by strong performance in the corporate and consumer segments, despite challenges in the SME segment. Meanwhile, asset quality improved in 2Q24. The NPL ratio also declined, and the CoC was revised down to 1.0% for FY24E.
▪️BBNI launched the Wondr app, which quickly gained 2mn users by Sep-24. The app is expected to drive long-term fee income growth and enhance transaction banking capabilities.
▪️Upgrade to BUY from HOLD for BBNI with higher TP of IDR6,000 which implied 1.3x PBV FY25E. We anticipate continued improvements in CoF and robust loan demand, particularly from corporate and consumer segments. While NIM growth may stabilize in 2H24, we expect further loan disbursements in sectors such as telecommunications, manufacturing, and energy.
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