May 02, 2016 15:43:03
Bank Rakyat Indonesia targets 3% growth in net profit

Bank Rakyat Indonesia (BBRI) targets its net profit to grow by 3% YoY for FY16. The bank stated that there are 3 main components that will affect its net profit this year, including overhead cost, cost of fund, and risk premium. The bank will focus on raising its funds from public and funding alternative aside from third-party funds. (Kompas)
Comment: Such management’s guidance is mainly inline with our forecast (+5.0% YoY net profit growth in our model) as we expect blended cost of funds would decline by 39bps to 3.48% this year on the back of lower time deposit (TD) rate with maximum TD rate of 75bps above policy rate (max 7.5%) guided by OJK for banks with core capital above IDR30trn. We also already anticipate lower asset yield to 11.22% with relatively stable micro lending proportion of c.33% of total loans portfolio by end-2016.