BRIS - Two thumbs up 9M24 earnings; ‘25F should continue

KBVS Update
Wednesday, 30 October 2024

BRIS: Two thumbs up 9M24 earnings; ‘25F should continue           
(Maintain BUY; with higher GGM TP: IDR3,670)

* BRIS's robust earnings streak continues (21.6% yoy), fueled by solid performance across the board. This impressive result arrived above both our and consensus expectations, achieving a remarkable run rate of 77.2% and 78.4%, respectively.

* Total financing growth (15.3% yoy) landed within BRIS's 2024 guidance with the big boost from high yield segment, surpassing both our projections and the broader banking industry's loan growth expectations for the year. Despite tight liquidity environment, BRIS enjoyed strong growth in TPF of 14.9% yoy, fueled by an 18.9% surge in CASA financing.

* Key performance metrics continued to improve. NIM expanded modestly to 5.6% from 5.5% in the previous quarter, marking the third consecutive quarter of growth from 5.4% in the first quarter of 2024. Risk metrics remained well-managed. NPL ratio declining, while CoC improved to 0.97% from 1.35% in the 3Q23 and 1.0% in the 2Q24.

* Given the robust 9M24, we anticipate another better-than-expected 4Q24 earnings result. Our confidence in this outlook is reinforced by a sensitivity analysis, which suggests that even under a conservative run-rate scenario of a 2.28% qoq decline in earnings, the FY24 net income would still exceed our forecast of IDR6.61 trillion.*

* Maintain BUY. We have extended our valuation horizon for BRIS to 2025. The stock has delivered a strong 12M return of 93.4% and is approaching our previous target price of IDR2,970. Our rolled-over ‘25F GGM-TP of IDR3,670 is pegged at 3.4x ‘25F P/B. The stock is currently trading at 2.7x ‘25F P/B, which is slightly above its historical average of 2.4x.

Regards,
Akhmad Nurcahyadi - KBVS Research