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BMRI

IJ  /  Click here for full PDF version 
 Authors   : Jovent Muliadi, Anthony 

• 1Q24 net profit of Rp12.7tr (+1% yoy) came behind amidst high base non-II and higher CoF. NII still grew by 5% yoy while provision was flat.
• NIM contracted by -30bp yoy to 5.1% amid pick up in CoF (+42bp yoy) underpin the revision in NIM guidance to 5-5.3% vs. 5.3-5.5% initially.
• We cut our FY24-26F EPS by 10-11% to incorporate lower NIM guidance and weaker non-ii. Maintain Buy with new TP of Rp7,800.

1Q24 results: benign PPOP amidst high base non-ii

BMRI

posted 1Q24 net profit of Rp12.7tr (+1% yoy), forming 20/22% of our/consensus FY24F estimates. PPOP growth was tepid (+1% yoy) amid modest NII growth (+5% yoy) and higher opex (+6% yoy). Non-interest income came at -1% yoy but this was due to drop in cash recovery at -44% yoy amidst 1Q23 high base. Provision decreased by -2% yoy, which brought 1Q24 credit costs to 1.1%, in-line with its FY24F guidance of 1-1.2%.
Inevitable lower NIM guidance from high CoF
Overall NIM contracted to 5.1% from 5.4/5.5% in 1Q23/FY23, below management's FY24F target of 5.3-5.5% largely due to pick up in CoF (+42bp yoy/+16bp qoq) despite higher LDR at 88% (vs. 86% in 1Q23/FY23). Hence, it now expects lower NIM of 5-5.3% in FY24F. Deposit grew by +13% yoy (flat qoq) supported by both

CASA

(+13% yoy/flat) and TD (+12% yoy/-1% qoq).
Loan growth was ahead guidance
On the bright side, overall loan growth was stellar at +19% yoy (+3% qoq) ahead of its guidance of 13-15%. The growth was led by corporate segment at +28% yoy (+3% qoq), followed by commercial at +20% yoy (+3% qoq), and subsidiaries at +16% yoy (+3% qoq). However, it decided to kept its loan growth guidance unchanged at 13-15%.
Sequential asset quality improvement
NPL improved by -60bp yoy but stable qoq at 1.2%, while SML improved by -10bp yoy but slightly pickup by +10bp qoq at 4%. This resulted in significant LAR improvement to 8.4% in 1Q24 vs. 11.3/8.6% in 1Q23/4Q23. LAR coverage stood at 45% in 1Q24 (vs. 47/45% in 1Q23/4Q23).
Maintain Buy with new TP of Rp7,800
We fine tune our FY24-26F EPS by 10-11% to incorporate lower NIM guidance. Nonetheless, we kept our Buy rating with lower TP of Rp7,800 (from Rp8,000 previously).

BMRI

is currently trading at 2.1x FY24F P/B (vs. 10Y average of 1.6x) and 11.4x FY24F P/E (vs. 10Y average of 11.9x). Risk is further NIM compression from elevated CoF.


Sumber : IPS