BBTN - Eyeing NPL below 3% this year

BBTN - Eyeing NPL below 3% this year Bank Tabungan Negara (BBTN) is targeting its NPL to improve and reached below 3% this year. A number of strategies were implemented, including the sale of non-performing loan assets. According to the financial report, BTN recorded a gross NPL ratio of 3.01% in 2023, down 37 bps from the 3.38% level in 2022. While BTN net NPL has been stable at 1.32% throughout 2023, This year, NPLs are targeted below 3%. The asset sale is targeted at IDR2 tn. BTN targets credit growth at the rate of 11% yoy. Last year, BBTN recorded positive loan growth at 11.2% yoy, while Syariah Financing noted growth at 17.4% yoy, resulting in a total loan growth of 11.9% yoy. (Source : Bisnis Indonesia) Comment : We think BBTN’s NPL target sounds achievable (KBVS ‘24F NPL for BBTN: 2.9%). The bank is also targeting its earnings to reach IDR3.9 tn, or in line with our ‘24F for BBTN PATMI of IDR3.8 tn. Following its successful asset bulk sales, we expect the second round of asset sales will be done before 2H24, ceteris paribus. Another catalyst will come from the sharia business unit spin-off plan, and once it turns into reality, we believe the synergy will have a positive impact on BBTN and, at the same time, create a fairer playing field for the syariah banking sector.