BBCA - Another robust bank only earnings in 10M24
KBVS Update
Thursday, 28 Nov 2024
BBCA: Another robust bank only earnings in 10M24
(Maintain BUY; GGM TP: IDR12,510)
* BBCA delivered another strong monthly performance. 10M24 bank-only earnings grew by a robust 14.9% yoy, driven by solid growth across all key metrics. BBCA's 10M24 bank-only net income is in line with our ‘24F, with a run rate of 85.3%. Our 10M24F of IDR45.39tn aligns closely with the actual 10M24 figure of IDR46.22 tn.
* BBCA successfully maintained a double-digit loan growth of 14.2% yoy, exceeded the bank's ‘24F guidance of 9-10% yoy and our forecast of 9.6% yoy. Total deposit grew by 2.7% yoy, slightly lower than the previous month's growth of 3.1% yoy. CASA ratio 1.6% yoy (Oct24) was up vs 1.5% yoy in Sep24.
* Given the strong 10M24 bank-only earnings performance, we anticipate that BBCA's FY24 net income will align with our expectations. Even under a conservative scenario for Nov24 and Dec24, the bank's FY24 bank-only PATMI is projected to grow by approximately 14.6% yoy to IDR54.8tn.
* We anticipate that BBCA will continue to deliver robust earnings. While the potential benefits from a low-interest rate environment may be limited, the bank's strong transactional banking foundation is expected to support NIM expansion. On the deposit side, deposit growth may face some pressure, but we anticipate a higher growth rate in 2025 compared to 2024, driven by lower SRBI rates and improved consumer spending power.
* Maintain BUY GGM-TP IDR12,510 (4.8x ‘25F P/B), while currently trade at 3.8x ‘25F P/B or slightly above average mean of 3.7x ‘25F P/B. Downside risks: 1) slower loan growth; 2) worsening NIM and AQ; 3) soaring CoC and NPL. 4) lower than expected interest income; 5) slower-than-expected economic activity; 6) strengthening DXY; 7) worsening middle-east tension; and 8) prolonged global uncertainty.
Regards,
Akhmad Nurcahyadi - KBVS Research