Sector Update / Banks / Click here for full PDF version
Author: Jovent Muliadi ;Anthony
- Aggregate big 4 banks 1Q24 net profit stood at Rp46.8tr (+4% yoy) was below estimates amid moderate PPOP growth due to CoF issue.
- This led to NIM contraction in qoq basis which resulted in lower NIM guidance (by 10-50bp lower). Only BBCA 's NIM was unaffected.
- BBRI revised up its CoC guidance which we think is prudent amid cyclical weakness in micro. Maintain OW with BBCA and BMRI as our picks.
Tepid results across banks except BBCA
Aggregate big 4 banks 1Q24 net profit stood at Rp46.8tr (+4% yoy) slightly below at 23% of our/consensus FY24F estimates. PPOP saw a decent growth (+10% yoy) driven by pick-up on non-II (+12% yoy) while NII was relatively mild (+5% yoy). BBRI saw the strongest PPOP growth (+22% yoy) while BBNI was the weakest (-5% yoy) along with NII (-10% yoy). Provision rose by +32% yoy amidst deteriorating micro asset quality and partly due to frontloading. Meanwhile, the rests booked lower provision.
Lower than expected NIM for most banks; BBCA was resilient
Most banks ( BBRI /BMRI/BBNI) posted qoq contraction in NIM (-20bp to -60bp qoq/-30bp to -70bp yoy) largely due to steep increase in CoF from tight liquidity condition; and came below expectations (10-50bp lower than FY24F guidance) and resulted on lower NIM guidance for BBRI and BMRI (reduced by 20-30bp). Only BBCA reported resilient NIM amid stable CoF, fig. 16.However, we think NIM may be bottomed in 1Q as liquidity has started to improve based on our channel check with the banks.
Nonetheless, loan growth remain strong
Aggregate loan growth was robust at +15% yoy (+3% qoq), particularly in corporate segment at +21% yoy (+4% qoq). BMRI led the growth at +19% yoy (+3% qoq) followed by BBCA at +17% yoy (+3% qoq) - both came ahead of its guidance. Overall deposit rose +10% yoy (+1% qoq) mainly driven by TD at +14% yoy (+4% qoq) while CASA was slower at +9% yoy (-1% qoq). LDR stood at 87% vs. 84/86% in 1Q23/4Q23.
Improving asset quality except for BBRI and BBNI
All banks saw a significant improvement in the asset quality (by290-370bp yoy). However on qoq basis, BBRI and BBNI saw a pick-up in LAR by 20bp and 40bp respectively which underpin the CoC revision for the former (to max 3% from 2.2-2.3%), while the latter decided not to revise its CoC. BBCA continue to have the highest LAR coverage at 72% (+220bp qoq) while other banks dropped by80-230bp qoq with BBNI was having the steepest drop.
Maintain OW with BBCA and BMRI as our top picks
Recall our note pre 1Q24 results announcement of possibly weak 1Q24 results (link), however we think at this point the SOE banks are oversold as the current drop (-22% for SOE from peak) has far exceed the past drops magnitude of 10-19% for SOE (in the last 5 years excluding Covid). We have all Buy recommendation for BBCA /BMRI/BBRI except for BBNI amid our concern on both its NIM and CoC but unchanged guidance. Upside risk is better NIM and CoC (for BBRI ) as rate hike cycle usually resulted in better NIM for Indo banks. Downside risk is higher CoC.
Sumber : IPS
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