BBTN - FY23 earnings grew strong

BBTN - FY23 earnings grew strong Bank Tabungan Negara (BBTN) FY23 earnings growth was reported at a strong figure of 15.0% yoy to IDR3.5 tn. Total loan and financing growth at 11.9% yoy and total TPF grew by 8.7% yoy. The bank has closed the bulk of asset sales divestments amounting to IDR861 bn. On the UUS spin off update, the bank stated that the process is expected to be completed by 2Q24. (Source: Company) Comment : In all, FY23 result beating the street forecast and our ‘23F earnings for BBTN (108.2%/106.5%), as well as 500 basis points higher than BBTN’s net profit upper range guidance in ‘23F of 8–10% yoy. Total loan where above industry growth of 10.4% yoy, 90 bps surpassing BBTN loan growth range guidance of 10–11% yoy and in line with our ‘23F for BBTN at IDR328,041 (101.7%). We expect BBTN will record another round of success on its asset bulk phase 2 plan (IDR1 tn) which is expected to be completed by the end of 1H24. We believe BBTN’s sharia business unit spin-off will turn into reality soon, as the synergy will have a positive impact on BBTN and will create a fairer landscape of competition in the Syariah banking industry. Maintain BUY, DDM TP of IDR1,770 (pegged at ‘24F P/B of 0.6x).