Company Update / IJ / Click here for full PDF version
Autho r (s): Jovent Muliadi ; Anthony
- BRI booked Rp51.4tr profit in FY22 (+67% yoy) and came above our and consensus estimates by 5%. Beat was due to non-II and lower CoC.
- NIM dropped to 7.9% in FY22 from 8.2% in 9M22 (7.7% in FY21) due to one-off modification loss impact from loan restructuring (c.50bp).
- CoC of 2.6%, lower than guidance 2.7-2.9% partly due to netting impact of modification loss. It guides CoC to drop to 2.2-2.4%; maintain Buy.
Beat from non-II and CoC
BRI posted Rp51.4tr of profit in FY22, up by 67% yoy (-16% qoq - drop in qoq was due to 4Q modification loss from restructuring big corporate debtors) and came above than our/consensus estimates (at 105%). Beat was coming from strong non-II (+16% yoy/+31% qoq and 11% above our estimates) due to strong fees (+12% yoy) and recovery growth (+33% yoy), along with better provision (-31% yoy/-22% qoq) which resulted in CoC of 2.6% vs. initial guidance of 2.7-2.9%.
Modification loss that arise in 4Q was one-off and bottom-line neutral
It was the only bank that posted qoq NIM drop (7.9% in FY22 vs. 8.2% in 9M22) largely due to modification loss impact (c.50bp to NIM/70bp to asset yield). This only arises in BRI due to different accounting standard with and (both also impacted by the restructuring of 2 SOEs). However, the impact of modification loss should be neutral to bottom line (lower NIM was offset by lower CoC) but in BRI case, it opts to reallocate some of the CoC.
Loan growth is slowly picking-up
Loan grew by 9% yoy (+2% qoq), the slowest vs. its peers but this was attributed to slower growth in non-micro segments (micro grew by 14% yoy) especially small (+3% yoy) and medium (-0.1% yoy) which shall improve going forward as 2022 was being used to fix the business and risk management processes. It guides for 10-12% loan growth in FY23F and in Jan despite no disbursement KUR, Kupedes outstanding loan has grown by 8% YTD which is impressive after posing 3 years of negative growth.
Biggest room to improve CoC; maintain Buy
NPL/LAR stood at 2.7/17.1% in FY22 vs. 3/24.1% in FY21 (3.1/19.3% in 9M22) while NPL/LAR coverage stood at 306/48%. CoC is also expected to trend down to 2.2-2.4% in FY23F vs. 2.6% in FY22 (indeed CoC has dropped to 1.6% in 4Q22 vs. 2.1/3.6% in 3Q/2Q22 - netting impact from modification loss in NII). We fine tune our FY23-24F EPS by 10-18% and maintain our Buy rating with BRI as we think the result was overlooked due to one-off impact and overblown concern on KUR.
Sumber : IPS
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