BMRI Earnings Flash: Solid Performance Should Continue
Key Takeaways:
• BMRI 1H23 booked a net profit of IDR25.3tn (+24.9% YoY) or IDR12.7tn (+0.89% QoQ) in 2Q23, slightly above the consensus & our FY23F target of 53%/51%, primarily driven by the increasing loan distribution and stable operating expense.
• NIM stood at 5.56% in 1H23, aligned with the management target of 5.3%-5.6%. We expect in the future, NIM will maintain at the current level and the loan growth will exceed the industry average.
• Loan grew at +5.5% QoQ, +11.8% YoY to IDR1,272tn, in line with the management target with an expectation of +10-12% YoY. BMRI's new loan mix and re-pricing strategy generate a higher loan yield to 7.85% (+98 bps YoY).
• Similar to BBNI and BBCA, BMRI NPL also experienced better credit quality with an NPL of 2.5% (-70 bps YoY) and an NPL Coverage of 308.8% in 1H23.
• BMRI's success in developing digital platforms (KOPRA and Livin') significantly affects their current account performance, with a remarkable growth of +23.3% YoY. BMRI also announced a higher CASA ratio of 73.4% (+2.67 pts YoY), which led to a better cost of credit with 1.19% (-23 bps YoY) in 1H23.
• We maintain our BUY rating with slightly higher GGM-based TP of IDR6,850/share which implies a 2.1x FY24F P/B. Downside risks to our call include slower than expected loan growth and asset quality deterioration.
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