BBCA - ‘24F earnings growth to continue

KBVS Update
Wednesday, 21 February 2024

BBCA - ‘24F Earnings Growth To Continue
(Maintain BUY; TP: 11,070)

•    We expect ‘24F earnings to grow by 11.1% yoy which will be back by steady NII growth, manageable cost to income and continuing low provisions expenses as a result of stable asset quality improvement.

•    We cautiously expect that ‘24F loan could record another higher-level yoy due to a higher based effect. Our ‘24F loan growth for BBCA of 10% yoy is in-line with the bank guidance at 9-10% yoy.

 •    With the possibility of a lower cost of funds and a slightly higher lending yield, we might witness BBCA NIM to be manageable even assuming loan growth will grow at a slower pace (high-based effect). Our ‘24F NIM for BBCA at 5.6% was in line with BBCA’s expectation of 5.5–5.6%.*

•    Ceteris paribus, we might witness an inline 1H24F earnings result with the potential for stronger 3Q24F and ‘24F yoy growth (11.1% yoy) backed by better confidence in the absence of a wait and see stance.

•    Maintain BUY. We raise our assumption on BBCA’s retention ratio by 25bps. Our new TP for BBCA of IDR11,070 is pegged at 4.9x ‘24F P/B while currently trading at 4.4x ‘24F P/B, or at its +1SD historical mean.

Regards,
Akhmad Nurcahyadi - KBVS Research team