Feb 02, 2016 23:25:38
A closer look at big banks’ unaudited FY15

Indonesia’s big banks have released their unaudited FY15 financial
results. Net profits are in line with our estimates and we expect no
negative surprises in NPL that might cause coverage ratios to drop
significantly upon the official FY15 announcement. Among the big
players, $BBRI remains our Top BUY for its attractive ROE.

$BBRI: Top BUY, TP at IDR13,000
$BBRI booked a IDR25t net profit (+7% YoY), in line with our IDR24.7t
forecast. Loans grew 13% YoY on strong expansion in the high-NIM micro
business. We expect NIM to remain close to 8% in 2016 on higher KUR
volume. $BBRI’s excellent risk control in the segment should allow the
bank to keep provisioning expense to a minimum while maintaining a
sufficient coverage ratio.

$BBCA: BUY, TP at IDR16,000
Net profit was IDR17.3t (+5% YoY), in line with our IDR18.2t forecast.
Loans grew 12% YoY and the bank had previously indicated that NPL
might tick up to as high as 1% by YE15. But even at this rate, $BBCA’s NPL
remains much below the industry’s average, and its rising provision
should ensure high coverage ratio. We maintain $BBCA as one of our top
BUYs in the sector for its stable earnings and asset quality.

$BMRI: HOLD, TP at IDR8,200
$BMRI’s net profit stood at IDR20t (+1% YoY), in line with our IDR19.8t
forecast. Nonetheless, we remain cautious on its 2016 outlook
considering $BMRI’s bigger exposure to corporate and SME business
compared to its peers and the fact that these segments are more
vulnerable to the recent slowdown in the economy. NPL is likely to
continue on an uptrend despite the bank’s aggressive loan restructuring
strategy in 2015.