BBCA - 1H24 financial results

BBCA - 1H24 financial results Bank Central Asia (BBCA) reported its 1H24 financial results. Net interest income rose 7.9% yoy and non-interest income grew by 12.1% yoy. Opex up 4.7% yoy. Yet, improving on quarterly basis (8.4% qoq). The bank saw solid PPOP growth of 11.2% yoy. Provision spike 13.1% yoy. Yet, sharply drop on quarterly basis (41.4%qoq). BBCA saw another healthy loan growth of 15.5% yoy. Third party funds grew by 5.0% yoy, while CASA up 5.8% yoy and Time deposit growth was flat at 1.7% yoy. On key performance metrics. NIM came in higher from 5.6% to 5.7% in 1H24 and 0.2% much better quarter on quarter to 5.8% in 2Q24. Credit cost improvement also remain intact from 0.5% to 0.3% and improves by 0.2% from 0.4% to 0.2% in 2Q24. Gross NPL rose to 2.2% from 1.9% in 1Q24. (Source : Company). Comment : BBCA reported another solid earnings growth. 1H24 PATMI growth mainly driven by strong performance from top to bottom. In all, 1H24 net profit came in above ours and consensus forecast at a run rate of 49.8%/50.3% vs 46%. On quarterly basis, 2Q24 earnings growth of 8.7% qoq was help by CIR improvement and a sharp drop provision (inc. loan recoveries) of 41.4% yoy. Total loan grew by 15.5% yoy, thanks to robust growth in corporate segment (19.9% yoy). Worth to note that SME and Sharia financing also recorded strong growth at 12.7% yoy and 21.0% yoy. On key performance metrics, NIM at 5.7% higher 0.1% yoy and 0.2% qoq to 5.8% vs 5.6% in 1Q24. What’s more, we like overall BBCA’s key metrics performance achievement and expect it would continue in 2H24 backed by its solid banking transactional base, low cost of deposits and well managed stable asset quality. Maintain BUY BBCA with GGM TP of IDR11,070 (4.8x ‘24F P/B), while currently trading at 4.5x ‘24F P/B, or slightly below its +2SD of 4.7x.