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BMRI - Soft 1Q24 earnings growth, yet inline

Akhmad Nurcahyadi 13 May 2024

KBVS Update
Monday, 13 May 2024

BMRI – Soft 1Q24 earnings growth, yet inline
(Maintain BUY; TP: IDR8,100)

* BMRI’s 1Q24 net profit growth of 1.13% yoy (IDR 12.70tn) was largely saved by the low provision figure*, which inched down 2.6% yoy. Despite flattish, BMRI’s 1Q24 earnings arrives within ours and ‘24F consensus expectations.

* Total loan (+19.1% yoy) came in above the industry figure as well as ‘24F management guidance, while TPF grew strongly (+13.0% yoy) amid the tight liquidity environment.

* Key risk metrics continue to record a healthier figure. Yet, NIM reported 33 bps lower on continuing COF pressure.

* Following the 25-bps BI rate increase and the ongoing concern about the cost of fund pressures, BMRI revised down its ‘24F NIM guidance by 20–30 bps from 5.3%–5.5% to 5.0%–5.3%. ‘24F NIM could remain arrives within management guidance, backed by (1) stable, solid corporate loan growth and a better portion from the higher loan yield segment; (2) continuing solid deposit mix and being less aggressive on rate competition; and (3) loan yield repricing.

* Maintain BUY with GGM-based TP of IDR8,100 (2.6x ’24F P/B), currently trading at 2.0x ‘24F P/B or slightly above its average historical mean of 1.9x.

 

Regards,
Akhmad Nurcahyadi - KBVS Research team

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