BBNI - Solid 9M23 earnings growth

BBNI - Solid 9M23 earnings growth Bank Negara Indonesia (BBNI) net interest income grew at single digit (+3.1% yoy, +3.3% qoq) amid mounting interest expenses. Yet sharp drop on provisions has made 9M23 earnings grew by 15.1% yoy (+7.3% qoq). Loan grew by 7.8% yoy, while TPF grew by 9.1% yoy with manageable CASA growth at 5.6% yoy. Key ratios recorded another solid figure, with NPL improves by 70bps yoy. CIR at 41.3% were 10bps better yoy, while NIM is well managed at 4.6%. (Source: Company). Comment: In all BBNI’s 9M23 earnings in line with ours and street expectation at a run-rate of 78%/75% (5yr historical average of 75%). We continue to like BBNI for its inline 9M23 results and key performance metrics which arrives within ‘23F management guidance. Loan growth acceleration likely to continue with asset quality improvement should remain intact. On SoE contractors watchlist debtors, Waskita provisions has reached 61%. Downside likely to be limited, as effort for toll divestment and continuing government support will overall act as a beanbag for any further latent worsen risk. We also think the bank will continue to get benefit from further loan repricing and thus should manage NIM expansion to continue. Maintain BUY with TP of IDR11,160 (1.4x ‘23F P/B).