BBRI - Loan disbursement soars 11.2% yoy in 1H24

BBRI - Loan disbursement soars 11.2% yoy in 1H24 Bank Rakyat Indonesia (BBRI), a leading Indonesian bank, has reported a double-digit growth in credit for the first half of 2024. The bank, listed under the stock code BBRI, has seen its credit reach IDR1,336.78 tn, marking an annual increase of 11.2%. The largest contribution to this credit growth continues to come from the micro, small, and medium enterprises (MSME) sector, which is a key focus for BRI. The MSME sector accounted for 81.96% of the total credit, equivalent to IDR1,095.64 tn. BRI's third-party funds (DPK) also grew by 11.6% annually, reaching IDR1,389.6 tn. This growth has eased the liquidity of the state-owned bank, as reflected in its loan-to-deposit ratio (LDR) of 87.19% in the first half of 2024, an improvement from 87.83% in the first half of 2023. However, BRI's net profit remained stagnant. According to the financial report released on Thursday (25/7), the bank's profit only grew by 0.95% annually, reaching IDR29.7 tn. One of the main factors causing this stagnation is the significant increase in provisioning costs. BRI's provisioning costs at the end of June 2024 rose by 52.2% annually, reaching IDR21.35 tn. (Source : Kontan). Comment : The robust loan growth has overall supported the net interest income growth that made net profit still arrive within ours and street expectation. We expect another solid loan growth coupled with continuing stable asset quality will overall maintain BBRI to reach its ‘24F performance target. Maintain BUY BBRI with GGM TP of IDR6,830 (3.0x ’24F P/B), while it’s currently trading at its average historical mean of 2.1x ‘24F.