Loan Growth Fuel Success, Guidance Upgraded
Key Takeaways:
▪️ NPAT reached IDR13.8tn in 2Q24 (+9.0% QoQ/ +9.3% YoY), primarily driven by a slight uptick in NII (+3% QoQ), manageable operating and credit costs (-21bps). Subsidiaries, particularly BSI, also played a significant role in this earnings improvement.
▪️ Loan surged by +6.8% QoQ/+20.5% YoY in 1H24, supported by corporate segment (+30% YoY) & commercial (+22% YoY). BMRI is considering repricing its loans following a policy rate hike while aiming to retain market share amidst strong demand for wholesale loans.
▪️ Deposit growth was also impressive at +5% QoQ/+15% YoY, with a significant boost in CASA deposits, resulting in a strengthened CASA ratio. Asset quality remained stable with an improved NPL of 1.2% and an NPL coverage ratio nearing 300%. The Livin app also saw a significant rise in users, contributing to fee-based income and enhancing digital lending offerings.
▪️ We maintain our BUY recommendation with TP of IDR7,750 which implied PBV FY24E/FY25F of 2.2x/2.1x. We expect potential loan growth surprises, coupled credit cost savings and steady ROE.
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