Equity Research
Company Update
Tuesday,06 October 2020
Bank Central Asia (BBCA IJ)
BUY
Upgrade
More room for flexibility
Last price (IDR)
27,600
Target Price (IDR)
33,000
Upside/Downside
+19.6%
Previous Target Price (IDR)
33,000
Stock Statistics
Sector
Banking
Bloomberg Ticker
BBCA IJ
No of Shrs (mn)
24,945
Mkt. Cap (IDRbn/USDmn)
688,476/46,519
Avg. daily T/O (IDRbn/USDmn)
578.2/39.1
Major shareholders (%)
PT Dwimuria Investama
54.9
Anthony Salim
1.8
Estimated free float
43.1
EPS Consensus (IDR)
2020F
2021F
2022F
Danareksa
872.8
1,164.9
1,409.2
Consensus
937.3
1,200.3
1,409.4
(6.9)
(2.9)
0.0
Danareksa/Cons
BBCA relative to JCI Index
We upgrade our call on BBCA to BUY with an unchanged GGM-derived TP of
IDR33,000 (implying 4.2x 2021F PBV) following the release of the 8M20 set of
results (bank only). We expect flattish loans growth this year with estimated
restructured loans at a maximum 30% of the loans book. As such, we estimate
5.8% NIM this year supported by its sizeable CASA deposits contribution to
total funding. The gross NPLs ratio is estimated to reach 2.3% as of December
2020F with higher credit costs of 215bps. All in all, we maintain our FY20F net
profits estimate of IDR21.5tn.
8M20 highlights. The 8M20 bank only net profits of IDR18.5tn (+2.8% yoy) were
driven by a c.18bps drop in NIM to 6.1% and 168bps credit costs. Meanwhile,
the operating expenses declined by 7.5% yoy to IDR18.1tn, resulting in a lower
Cost to Income Ratio (CIR) at 38.3% in 8M20. With 1.3% yoy loans growth and
13.9% yoy customer deposits growth, LDR declined to 70.9% in August 2020.
Ample room for a lower blended CoF. Amid the COVID-19 outbreak and
dimmer outlook for global and domestic economic growth, NIM could be
managed at 6.1% in 8M20 (bank only). This reflects a c.50bps drop in the
blended CoF to 1.5% in 8M20 based on our calculation. BBCA’s management
also emphasised that the bank would continue to cut the TD rate, seeking to
lower the blended CoF. We believe such a target is achievable due to the
sizeable and sticky CASA deposits. As such, we expect a 75.3% CASA deposits
contribution to total customer deposits as of December 2020F.
Expecting a higher gross NPLs ratio and higher credit costs. During the latest
analyst meeting, BBCA’s management emphasised that eligible restructured
loans should be 30% of its loans book at most. This amount may be dominated
by vehicle loans, both 2W and 4W. Yet for this segment, BBCA only provides
longer tenor schemes. Nonetheless, given the currently challenging climate, we
assume a higher gross NPLs ratio of 2.3% by December 2020F with 215bps
credit costs. We believe that our assumptions for both figures are relatively
conservative, thus providing more upside potential for BBCA’s performance
going forward.
Upgrade to BUY, unchanged TP of IDR33,000. We upgrade our call to BUY with
an unchanged GGM-derived TP of IDR33,000 (implying 4.2x 2021F PBV). We
assume a 6.7% CoE, 18.3% sustainable ROAE and 3% long-term growth.
Source : Bloomberg
Key Financials
Year to 31 Dec
2018A
2019A
2020F
2021F
2022F
PPOP (IDRbn)
35,383
40,880
39,123
44,481
50,293
Net profit (IDRbn)
25,855
28,565
21,520
28,722
34,743
EPS (IDR)
1,048.7
1,158.6
872.8
1,164.9
1,409.2
EPS growth (%)
BVPS (IDR)
10.9
10.5
(24.7)
33.5
21.0
6,151.3
7,059.1
7,376.9
7,929.9
8,577.8
Eka Savitri
PER (x)
26.3
23.8
31.6
23.7
19.6
(62-21) 5091 4100 ext.3506
PBV (x)
4.5
3.9
3.7
3.5
3.2
eka.savitri@danareksa.co.id
Dividend yield (%)
ROAE (%)
1.2
2.0
1.8
2.3
2.7
18.3
17.5
12.1
15.2
17.1
Source : BBCA, Danareksa Estimates
www.danareksa.com
See important disclosure at the back of this report
1
Exhibit 1. Loans and Growth
Exhibit 2. Net Interest Income and Growth
Source: Company, Danareksa Sekuritas estimates
Source: Company, Danareksa Sekuritas estimates
Exhibit 3. NIM and LDR
Exhibit 4. NPLs
Source: Company, Danareksa Sekuritas estimates
Source: Company, Danareksa Sekuritas estimates
Exhibit 6. PE Band Chart
Fwd P/BV
-1SD
Mean
ROAE (RHS)
Source: Bloomberg, Danareksa Sekuritas estimates
www.danareksa.com
+1SD
5,0
Fwd P/E
Mean
Jul-20
Jul-19
Jan-20
Jul-18
Jan-19
Jul-17
+1SD
Jan-18
-
Jul-16
-
10,0
Jan-17
1,5
Jan-11
Jul-11
Jan-12
Jul-12
Jan-13
Jul-13
Jan-14
Jul-14
Jan-15
Jul-15
Jan-16
Jul-16
Jan-17
Jul-17
Jan-18
Jul-18
Jan-19
Jul-19
Jan-20
Jul-20
5,0
Jul-15
2,5
2,0
20,0
15,0
Jan-16
10,0
25,0
Jul-14
15,0
3,0
Jan-15
3,5
35,0
30,0
Jul-13
20,0
x
40,0
Jan-14
25,0
4,0
45,0
Jul-12
4,5
30,0
Jan-13
%
Jul-11
x
Jan-12
5,0
Jan-11
Exhibit 5. PBV ROAE Band Chart
-1SD
Source: Bloomberg, Danareksa Sekuritas estimates
See important disclosure at the back of this report
2
Exhibit 7. BBCA’s 8M20 highlights (bank only)
FY End (IDR bn)
5M20
6M20
7M20
8M20
Interest income
Interest expense
Net interest income
Net interest margin (%)
26,152
(4,772)
21,380
6.1
33,186
(5,937)
27,249
6.5
36,372
(6,594)
29,778
6.1
41,458
(7,496)
33,962
6.1
Non-interest income
12,526
10,531
11,493
13,156
33,906
(16,649)
49.1
37,780
(16,248)
43.0
41,271
(16,181)
39.2
47,118
(18,064)
38.3
Pre-provision operating profit
17,257
21,532
25,090
29,053
Total provisions
Credit costs (bps)
(5,708)
232
(6,541)
224
(6,633)
195
(6,493)
168
Pre-tax profit
Net profit
Net profit yoy growth (%)
11,549
9,574
(3.5)
14,990
12,240
(4.8)
18,496
15,214
0.0
22,599
18,524
2.8
Key Balance Sheet Data (IDR bn)
Gross loans
Total assets
CASA deposits
595,029
954,071
575,569
582,184
957,694
574,785
577,375
967,842
580,829
570,354
982,435
588,198
Customer deposits
Equity
757,157
158,066
756,917
161,885
763,139
166,348
769,347
170,805
7.2
14.7
75.3
76.0
1.5
6.1
7.5
5.5
13.2
73.6
75.9
1.6
6.6
8.0
3.4
13.1
72.3
76.1
1.5
6.1
7.4
1.3
13.9
70.9
76.5
1.5
6.1
7.4
Total operating income
Operating expenses
CIR (%)
Key Ratios
Gross loans yoy growth (%)
Cust. deposits yoy growth (%)
LDR (%)
CASA ratio (%)
Cost of funds (%)
NIM (%)
Asset yields (%)
Source : Company, Danareksa Sekuritas estimates
www.danareksa.com
See important disclosure at the back of this report
3
Exhibit 8. Income Statement
Year to 31 Dec (IDRbn)
2018A
2019A
2020F
2021F
2022F
Interest Income
56,767
63,838
61,349
67,404
73,073
Interest Expense
(11,476)
(13,360)
(12,799)
(12,986)
(13,317)
Net Interest Income
45,291
50,477
48,550
54,417
59,756
Non-Interest Income (NII)
17,744
21,145
23,219
24,757
27,888
Oper. Income
63,034
71,623
71,769
79,175
87,643
(27,652)
(30,742)
(32,646)
(34,694)
(37,350)
Pre-provisions profit
35,383
40,880
39,123
44,481
50,293
Provisions & Allowances
(2,677)
(4,591)
(12,711)
(9,233)
(7,656)
Operating Profits
32,706
36,289
26,411
35,248
42,637
0
0
0
0
0
Oper. Expenses
Non-Operating Income
Exceptionals
0
0
0
0
0
Pre-tax Profit
32,706
36,289
26,411
35,248
42,637
Income Tax
(6,854)
(7,719)
(4,886)
(6,521)
(7,888)
Minorities
3
(5)
(5)
(6)
(6)
Net Profit
25,855
28,565
21,520
28,722
34,743
Exhibit 9. Balance Sheet
Year to 31 Dec (IDRbn)
2018A
2019A
2020F
2021F
2022F
Gross Loans
538,099
586,940
595,815
633,521
693,597
Provisions
(13,569)
(14,906)
(27,582)
(26,659)
(26,531)
Net Loans
524,530
572,034
568,233
606,862
667,066
Govt. Bonds
0
0
0
0
0
114,922
148,893
177,179
191,893
194,819
Other Earnings Assets
12,612
16,181
13,395
14,502
14,447
Total Earnings Assets
726,610
812,552
850,787
906,607
972,134
29,453
31,874
33,198
34,485
35,859
Securities
Fixed Assets
Non-Earnings Assets
24,023
23,980
22,200
23,401
23,194
Total Assets
824,788
918,989
950,947
1,010,662
1,077,206
Customer Deposits
629,812
698,980
723,955
768,852
817,938
Banks Deposits
6,494
6,717
6,898
6,749
6,845
Int. Bearing Liab. - Others
5,217
5,815
6,014
6,386
6,812
673,035
744,846
768,969
815,050
865,620
16,091
18,929
17,510
18,219
17,865
Retained Earnings
135,569
155,114
164,368
177,293
193,622
Shareholders' Funds
151,660
174,043
181,878
195,512
211,486
94
100
100
100
100
824,788
918,989
950,947
1,010,662
1,077,206
Total Liabilities
Share capital & Reserves
Minority interests
Total Equity & Liabilities
www.danareksa.com
See important disclosure at the back of this report
4
Exhibit 10. Ratios
Year to 31 Dec (IDRbn)
Yield on Earning Assets
2018A
8.2
2019A
8.3
2020F
7.4
2021F
7.7
2022F
7.8
Cost of funds
1.8
1.9
1.7
1.7
1.6
Interest Spread
6.3
6.3
5.6
6.0
6.1
Net Interest Margin
6.5
6.6
5.8
6.2
6.4
Cost/Income Ratio
43.9
42.9
45.5
43.8
42.6
Oper. Exp./Oper. Gross Inc.
56.1
57.3
68.8
61.8
57.8
1.4
1.3
2.3
2.1
1.9
178.7
189.2
197.1
199.1
201.1
Gross NPL Ratio
LLP/Gross NPL
Cost of Credit
0.5
0.8
2.1
1.5
1.2
Loan to Deposit Ratio
85.4
84.0
82.3
82.4
84.8
Loan to Funding Ratio
85.4
83.8
82.1
82.3
84.7
CASA Mix
75.9
75.2
75.3
75.7
76.0
ROAE
18.3
17.5
12.1
15.2
17.1
ROAA
3.3
3.3
2.3
2.9
3.3
24.6
22.6
22.4
22.6
22.1
2018A
2019A
2020F
2021F
2022F
CAR
Exhibit 11. Dupont and growth
Year to 31 Dec
Dupont
4.2
4.2
2.8
3.6
4.1
79.0
78.7
81.5
81.5
81.5
Post-Tax ROAA
3.3
3.3
2.3
2.9
3.3
Goodwil, Assoc& Min
0.0
0.0
0.0
0.0
0.0
Pre-Tax ROAA
Tax Retention rate
5.6
5.4
5.3
5.2
5.1
18.3
17.5
12.1
15.2
17.1
Interest income
5.6
12.5
(3.9)
9.9
8.4
Net Interest Income
8.3
11.5
(3.8)
12.1
9.8
Other Oper. Expenses
9.8
11.2
6.2
6.3
7.7
Fee Based Income
15.5
13.4
10.7
11.5
13.8
Pre-Provision Oper. Profit
11.3
15.5
(4.3)
13.7
13.1
Net Profit
10.9
10.5
(24.7)
33.5
21.0
Shareholders’ Equity
15.5
14.8
4.5
7.5
8.2
Loan
15.1
9.1
1.5
6.3
9.5
Earnings Asset
9.3
11.8
4.7
6.6
7.2
Deposit
8.4
10.9
3.6
6.1
6.3
Int. Bearing Liab.
8.2
10.9
3.5
6.1
6.4
CASA
8.9
9.8
3.8
6.6
6.8
Total Asset
9.9
11.4
3.5
6.3
6.6
Leverage
ROAE
Growth (%)
Source : BBCA, Danareksa Estimates