Friday, 19 December 2014
BANKING/COMPANY UPDATE
Bank Negara Indonesia
BUY
Target Price, IDR
6,750
Upside
12.9%
BBNI IJ/BBNI.JK
Given the closer gap between BBNI and big banks, we believe that BBNI deserves a
re-rating in its valuation. Furthermore, post 22.5% 3-year CAGR growth, loans
5,975 already grew at a softer rate of 14.1% YoY in September 2014 with slower economic
18,462 growth in 3Q14 at 5.01%. Thus, we project loans will grow at more sustainable figure
of 15.1-15.2% in 2015-16F. Apart from that, going forward margin should slightly
110,311
normalize. In 9M14, NIM stood at 6.1% despite higher blended CoF of 3.3%.
8,783
Nonetheless, NIM will fall to 5.7% in FY15-16F due to stable blended CoF at 2.9%. We
12.8
upgrade our target price to IDR6,750 derived from DBV model with lower discount
at 25% from previously 30% as BBNI deserves a re-rating. This target price implies
IDR 6,300 PBV 2.0-1.7x for 2015-16F. BUY maintained.
Last Price, IDR
No. of shares (mn)
Market Cap, Rp bn
(US$ mn)
3M T/O, US$mn
Last Recommendation
05-Sep-14
25-Jul-14
09-May-14
BUY
BUY
BUY
IDR 5,400
IDR 5,400
BBNI relative to JCI Index
BBNI (LHS)
Closing the gap
Relative to JCI Index (RHS)
%
Rp
30
6,000
20
5,000
10
Normalized loans growth
Following 22.5% 3-year CAGR loans growth, BBNI has opted to slow its loans growth in the current
macroeconomic landscape marked by tighter liquidity conditions. As a result, in September 2014,
loans only grew 14.1% YoY. In addition, BI’s LTV regulation led to much slower consumer loans
growth of only 3.3% YoY, with mortgages still dominating (they accounted for 62.8% of the total
consumer loans as of September 2014). All in all, we forecast loans growth of a more sustainable
15.1-15.2% in 2015-16F with manageable gross NPLs at 2.3% as of December 2015, then slightly
down to 2.2% as of December 2016F.
4,000
0
12/18/14
11/20/14
9/25/14
10/23/14
8/28/14
7/3/14
7/31/14
6/5/14
5/8/14
4/10/14
3/13/14
2/13/14
1/16/14
-10
12/19/13
3,000
Market Recommendation
BUY
19
HOLD
SELL
Stable margin
Meanwhile, Net Interest Margin (NIM) also stable at 6.1% in 9M14 from 6.2% in 9M13 despite a higher
blended CoF (up 90 bps to 3.3% in 9M14). This achievement was backed by the management’s policy
to cherry pick special TD rates for selected customers and re-price policy on its loan interest rate
by around 50-75 bps in general. Nonetheless, we forecast NIM will slightly fall to 5.7% in FY15F
and flat at that figure in FY16F as we believe that blended CoF will stay at 2.9% for FY15-16F due
to flat BI rate outlook as well as fed rate increase in 2015.
12
2
Danareksa vs Consensus
Target price, IDR
EPS 2014F, IDR
PBV 2014F, x
Our
6,750
533
2.0
Cons
6,356
538
2.0
Eka Savitri
(62-21) 2955 5825
[email protected]
Danareksa research reports are also
available at Reuters Multex and First Call
Direct and Bloomberg.
www.danareksa.com
% Diff
6.2
-0.9
0.0
BUY, TP of IDR6,750
With the normalized loans growth and stable margins as well as the appreciation on BBNI’s stock
(YtD up by 50.0%) we believe BBNI deserves a re-rating hence lower gap with big banks. Using the
Deposit Base Valuation (DBV) model with a 13.7% cost of equity, 6.0% terminal growth rate and
lower discount rate of 25% from previously 30%, we arrive at a new Target Price of IDR6,750. Our
Target Price translates into PBV 2015-16F of 2.0-1.7x. Maintain BUY.
Net interest income, IDR bn
PPOP, IDR bn
PBT, IDR bn
Net income, IDR bn
EPS, IDR
EPS growth, %
Dividend yield, %
ROE, %
PBV, x
PER, x
BVPS, IDR
2012
2013
2014F
2015F
2016F
15,459
11,166
8,900
7,046
378
21
1.9
17.4
2.6
15.8
2,331
19,058
13,926
11,278
9,054
486
29
2.4
19.9
2.3
12.3
2,552
20,959
15,386
12,432
9,942
533
10
2.2
19.4
2.0
11.2
2,952
22,960
16,878
13,732
10,981
589
10
2.5
18.6
1.8
10.1
3,394
25,821
19,059
15,503
12,397
665
13
2.2
18.2
1.5
9.0
3,926
See important disclosure on the back of this report
19 Desember 2014
Bank Negara Indonesia
Normalized loans growth
Following 22.5% 3-year CAGR loans growth, BBNI has opted to slow its loans growth in the
current macroeconomic landscape marked by tighter liquidity conditions. As a result, in
September 2014, loans only grew 14.1% YoY. However, in January until September 2014
period shows higher total approval rate of 66.3% compared to the same period last year
of 63.0%, concentrating in eight targeted sectors. Both figures can act as proxies for softer
loans demand throughout 16 regions in Indonesia divided by BNI.
In addition, BI’s LTV regulation led to much slower consumer loans growth of only 3.3% YoY,
with mortgages still dominates the consumer loans portfolio (accounted for 62.8% of the
total consumer loans as of September 2014). While the mortgage seems flat, credit card subsegment shows higher contribution from only 10.5% as of September 2013 to 11.4% as of
September 2014 supported by offering premium credit card brand to high net worth
individuals.
All in all, we forecast loans growth of a more sustainable 15.1-15.2% in 2015-16F with
manageable gross NPL at 2.3% as of December 2015, then slightly down to 2.2% as of
December 2016F. We believe these forecast figures are reasonable backed by ample liquidity
position with modified LDR of 87.2% and 88.1% as of December 2015-16F.
Exhibit 1. Moderate loans growth
WC (LHS)
Others (LHS)
IDR tn
Consumer (LHS)
Growth (RHS)
Investment (LHS)
%
30
400
350
24.9
26.3
25
300
22.8
250
20
19.9
200
14.6
12.8
15.1
14.1
150
15.2 15
10
100
7.9
50
5
0
0
Dec 08
Dec 09
Dec 10
Dec 11
Dec 12
Dec 13
Sep 14
Dec 14F Dec 15F Dec 16F
Source: Company, Danareksa Sekuritas
Exhibit 2. with ample liquidity position
%
LDR
Mod. LDR
95
90
85
80
75
70
65
60
Dec 08
Dec 09
Dec 10
Dec 11
Dec 12
Dec 13
Sep 14 Dec 14F Dec 15F Dec 16F
Source: Company, Danareksa Sekuritas
2
19 Desember 2014
Bank Negara Indonesia
Stable Margin
Meanwhile, Net Interest Margin (NIM) stable at 6.1% in 9M14 despite a higher blended CoF
(up 90 bps to 3.3% in 9M14). This achievement was backed by the management’s policy to
cherry pick special TD rates for selected customers and re-price policy on its loan interest
rate by around 50-75 bps in general. As of September 2014, the CASA proportion still can be
managed at 62.0% of total customer deposits.
Nonetheless, we forecast NIM will slightly fall to 5.7% in FY15F and flat at that figure in FY16F
as we believe that blended CoF will stay at 2.9% for FY15-16F due to the manageable deposits
structure with moderate growth figure of 13.5% for 2015F also CASA proportion above 60.0%
level.
Exhibit 3. Stable NIM outlook
NIM
%
CoF
7.0
6.0
5.0
4.0
3.0
2.0
1.0
0.0
2009
2010
2011
2012
2013
9M14
2014F
2015F
2016F
Source: Company, Danareksa Sekuritas
BUY, TP of IDR6,750
Given the normalized loans growth with stable margins as well as the appreciation on BBNI’s
stock (YtD up by 50.0%) should indicated that the stock’s deserves a re-rating. Using the
Deposit Base Valuation (DBV) model with a 13.7% cost of equity, 6.0% terminal growth rate
and lower discount rate of 25% (previously 30%), we arrive at a new Target Price of IDR6,750.
Our Target Price translates into PBV 2015-16F of 2.0-1.7x. BUY maintained.
Exhibit 4. Current rolling PBV already above its average
x
2.4
+1 std dev 1.9x
2.0
1.6
1.2
Average 1.5x
0.8
-1 std dev 1.1x
0.4
Dec-14
Jul-14
Feb-14
Sep-13
Mar-13
Oct-12
May-12
Dec-11
Jun-11
Jan-11
Aug-10
Mar-10
Oct-09
May-09
Jul-08
Dec-08
Feb-08
Sep-07
Apr-07
Jun-06
Nov-06
Dec-05
0.0
Source: Bloomberg, Danareksa Sekuritas
3
19 Desember 2014
Bank Negara Indonesia
Exhibit 5. Current rolling PE at lower range
x
40
35
30
25
+1 std dev 20.2x
20
Average 12.7x
15
10
5
-1 std dev 5.0x
Dec-14
Jul-14
Feb-14
Sep-13
Mar-13
Oct-12
May-12
Dec-11
Jun-11
Jan-11
Mar-10
Aug-10
Oct-09
Dec-08
May-09
Jul-08
Feb-08
Apr-07
Sep-07
Nov-06
Jun-06
Dec-05
0
Source: Bloomberg, Danareksa Sekuritas
Exhibit 6. PBV/ROE matrix
%
30
BBRI
BBCA
25
BBNI
20
BBTN
15
BBKP BJTM
BJBR
BMRI
PNBN
BTPN
BNGA
10
BDMN
5
x
0
0.0
0.5
1.0
1.5
2.0
2.5
3.0
3.5
4.0
4.5
Source: Bloomberg, Danareksa Sekuritas
4
19 Desember 2014
Bank Negara Indonesia
Exhibit 7. Balance sheet (IDR bn)
Cash
Placement BI and banks
Marketable securities
Government bond
Net loan
Fixed assets - net
Others
Total assets
Demand deposit
Saving deposit
Time deposit
Deposit from customers
Deposit from other banks
Securities issued
Borrowings
Other liabilities
Total liabilities
Minority
Equity
Earning assets
Interest bearing liabilities
2012
2013
2014F
2015F
2016F
7,969
60,880
9,801
38,561
193,835
4,592
17,666
333,304
73,366
100,083
84,212
257,661
3,245
4,769
8,750
15,354
289,778
52
43,473
290,438
277,150
10,090
50,705
11,966
41,432
243,758
5,514
23,191
386,655
88,183
111,800
91,907
291,890
3,185
6,037
18,951
18,909
338,971
83
47,600
337,125
321,822
11,020
55,579
13,162
43,545
279,176
5,481
24,777
432,740
91,775
115,788
121,425
328,988
2,496
5,918
19,898
20,297
377,597
87
55,056
380,014
359,771
12,391
59,081
12,088
46,710
321,254
5,389
28,110
485,023
107,221
134,934
131,186
373,342
2,321
5,799
17,908
22,269
421,639
92
63,292
427,049
402,046
13,301
66,784
12,901
50,093
370,237
5,251
29,121
547,687
128,490
159,128
138,799
426,417
2,403
5,683
16,117
23,759
474,380
96
73,210
484,255
453,517
2012
2013
2014F
2015F
2016F
22,705
7,246
15,459
17
3,155
5,290
8,446
23,905
15
3,921
5,578
3,241
12,739
14
11,166
2,525
8,641
19
259
8,900
19
1,851
2
7,046
21
18,649
378
26,451
7,392
19,058
23
4,000
5,441
9,441
28,499
19
4,540
6,084
3,949
14,573
14
13,926
2,708
11,219
30
59
11,278
27
2,220
4
9,054
29
18,649
486
30,798
9,839
20,959
10
4,556
5,793
10,349
31,308
10
5,194
6,820
3,908
15,922
9
15,386
3,150
12,235
9
197
12,432
10
2,486
4
9,942
10
18,649
533
33,827
10,867
22,960
10
5,154
6,281
11,435
34,396
10
5,714
7,417
4,386
17,518
10
16,878
3,334
13,543
11
189
13,732
10
2,746
4
10,981
10
18,649
589
38,215
12,394
25,821
12
5,846
7,144
12,990
38,811
13
6,464
8,243
5,045
19,752
13
19,059
3,712
15,347
13
156
15,503
13
3,101
5
12,397
13
18,649
665
Source: Comnpany, Danareksa Sekuritas
Exhibit 8. Profit and loss (IDR bn)
Interest income
Interest expense
Net interest income
% yoy growth
Fee based income
Other opr. inc.
Non interest income
Total operating income
% yoy growth
G&A exp.
Personnel exp.
Other opr. exp.
Total operating expense
% yoy growth
Pre-provisioning profit
Provision
Operating profit
% yoy growth
Other inc./exp.
Profit before tax
% yoy growth
Tax
Minority interest
Net profit
% yoy growth
No of share, mn
EPS
Source: Comnpany, Danareksa Sekuritas
5
19 Desember 2014
Bank Negara Indonesia
Exhibit 9. Selected ratios (%)
2012
2013
2014F
2015F
2016F
NIM
Fee based/total income
BOPO
CIR
ROAE
ROAA
CAR
5.6
13.2
72.3
53.3
17.4
2.2
16.6
6.1
14.0
68.7
51.1
19.9
2.5
14.6
5.8
14.6
70.3
50.9
19.4
2.4
15.2
5.7
15.0
70.1
50.9
18.6
2.4
15.5
5.7
15.1
70.0
50.9
18.2
2.4
15.9
Avg yield on earning assets
Loans/earning assets
Earning assets/total asset
Loan growth
Avg cost of fund
Deposit/int bearing liab.
Deposit growth
Int bearing liab./total asset
8.2
66.7
87.1
22.8
2.8
93.0
11.4
83.2
8.4
72.3
87.2
24.9
2.5
90.7
13.3
83.2
8.6
73.5
87.8
14.6
2.9
91.4
12.7
83.1
8.4
75.2
88.0
15.1
2.9
92.9
13.5
82.9
8.4
76.5
88.4
15.2
2.9
94.0
14.2
82.8
2.8
122.5
77.9
76.5
2.2
126.9
85.9
84.1
2.3
122.2
87.3
85.8
2.3
124.2
88.5
87.2
2.2
127.3
89.3
88.1
NPL - gross
Coverage
LDR
Mod. LDR
Source: Company, Danareksa Sekuritas
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19 Desember 2014
Bank Negara Indonesia
DISCLAIMER
The information contained in this report has been taken from sources which we deem reliable. However, none of P.T. Danareksa Sekuritas and/or its affiliated companies and/or
their respective employees and/or agents makes any representation or warranty (express or implied) or accepts any responsibility or liability as to, or in relation to, the accuracy or
completeness of the information and opinions contained in this report or as to any information contained in this report or any other such information or opinions remaining
unchanged after the issue thereof.
We expressly disclaim any responsibility or liability (express or implied) of P.T. Danareksa Sekuritas, its affiliated companies and their respective employees and agents whatsoever
and howsoever arising (including, without limitation for any claims, proceedings, action , suits, losses, expenses, damages or costs) which may be brought against or suffered by
any person as a results of acting in reliance upon the whole or any part of the contents of this report and neither P.T. Danareksa Sekuritas, its affiliated companies or their respective
employees or agents accepts liability for any errors, omissions or mis-statements, negligent or otherwise, in the report and any liability in respect of the report or any inaccuracy
therein or omission therefrom which might otherwise arise is hereby expresses disclaimed.
The information contained in this report is not be taken as any recommendation made by P.T. Danareksa Sekuritas or any other person to enter into any agreement with regard to
any investment mentioned in this document. This report is prepared for general circulation. It does not have regards to the specific person who may receive this report. In
considering any investments you should make your own independent assessment and seek your own professional financial and legal advice.
7