7-May-2014
Equity
Company Update
PT Bank BJB (Persero) Tbk
Angky Agani
[email protected]
BJBR IJ / BJBR.JK
Banking
HOLD (TP Rp930)
Maintained
(Prev TP Rp930)
Last Price (Rp)
1,040
Upside/Downside
1.6%
Consensus (Rp)
1,108
52 W High / Low (Rp)
1,290 – 720
52 W Daily Avg Vol (mn shares)
12.8
Issued Shares (mn shares)
9,696.3
Market Cap (Rp bn)
8,872.1
Stock Performance
% ch ang e
1 M
3 M
12 M
- 20. 8%
- 3.2 %
- 23. 8%
10.0%
Depressing Results
BJBR’s 1Q14 net profit dropped 12.2% yoy to Rp326 bn from Rp372 bn in
1Q13, inline with our previous forecast. For the time being, we leave our
earnings forecast unchanged, but downward revision is likely if performance
does not show a significant improvement. Overall, BJBR delivered poor
financial performance in 1Q14, with flat loan growth, higher NPL, decline in
margin, and weaker profitability. We upgrade our rating to HOLD with
maintained TP at Rp930.
Loan expansion came to a standstill. With LDR already at 97% in the last
period review, BJBR loan portfolio only rose Rp200 bn or 0.5% qoq (20% yoy)
totaling to Rp45.5 tn. In its effort to increase funding liquidity, BJBR was doing
quite well in increasing customer deposits by 23.9% qoq (28% yoy) to Rp58 tn
and brought down LDR to 78% in 1Q14. But, as expected, CASA ratio down by
1,600 bps to 44% in 1Q14 (FY13: 60%). Although LDR has improved, loan
expansion remains challenging as BJBR is still struggling with lowering its NPL
(now stood at 3.8%, up 100 bps in just three-month period). It is even harder
for BJBR to acquire new debtors and originate new loan with prime quality in
this currently lackluster market condition. The micro loan portfolio, which
accounted for 11.4% of the total, experienced a huge increase in NPL by 510
bps qoq to 16.4%. Meanwhile, commercial and mortgage with loan portion of
13% and 9% of the total respectively, also have high NPL at 11% and 4.1%
respectively.
5.0%
0.0%
May-13
Jun-13
Jul-13
Aug-13
Sep-13 Oct-13
Nov-13 Dec-13
Jan-14
Feb-14 Mar-14
Apr-14
-5.0%
-10.0%
-15.0%
-20.0%
-25.0%
-30.0%
-35.0%
-40.0%
-45.0%
JCI
BJBR
Major Shareholders :
Government of West Java & Banten
75.0%
Public
25.0%
Earnings Estimates
2014F
2015F
Net Profit (IDR BN)
AAA Estimate
1,306
1,314
Consensus
1,412
1,632
AAA EPS
134
135
Consensus EPS
142
160
EPS (IDR)
PT Andalan Artha Advisindo Sekuritas
BJBR high NIM subsided in 1Q14, down 120 bps to 6.8%. BJBR 1Q14 Net
income dropped 12.2% yoy, to only Rp326 bn (1Q13: Rp372 bn). BJBR interest
income dropped slightly below 4Q13 to Rp2.1 tn. Unsurprisingly BJBR’s
average loan yield fell 90 bps from FY13, showing that BJBR has very limited
pricing flexibility. Meanwhile, interest expense up 12.4% qoq, led by higher
cost of fund as BJBR time deposits grew 75% qoq, lowering CASA ratio to 44%
and LDR to 78%. BJBR also has to increased time deposit rate to adjust with
market rate. The provision expense only increased by 10% yoy despite 100
bps higher NPL and this brought coverage ratio to drop to only 68.5%. In sum,
BJBR did not sufficiently build loss provision and write-off their nonperforming assets, although NPL keep raising overtime.
We upgrade our rating to HOLD from Sell with maintained TP at Rp930. Our
TP implies FY14F PER of 6.92x and PBV of 1.23x. The recommendation
upgrade is solely due to market movement as BJBR share price is now only
1.6% below our TP. On the next period, if the performance does not improve
significantly, we may be compelled to downgrade our earnings estimate.
FINANCIAL SUMMARY
Rp bn
2012A
PPOP
1,823
Net Profit
1,193
EPS (Rp)
123
Growth (%)
23.9%
P/E (x)
8.62
P/BV (x)
1.72
Div. Yield (%)
6.5%
ROAE (%)
21.0%
Source : Company, AAA Securities
2013A
2,368
1,376
142
15.1%
6.29
1.29
7.6%
21.7%
2014F
2,498
1,306
134
-5.1%
6.92
1.23
6.8%
18.6%
2015F
2,347
1,314
135
0.6%
6.88
1.12
7.0%
17.1%
2016F
2,429
1,338
138
1.8%
6.76
1.03
7.1%
16.0%
P a g e |1
Company Update | 7-May-2014
PT Bank BJB (Persero) Tbk
BJBR FY13 Performance
Income Statement Cons (Rp bn)
3Q13
4Q13
%QoQ
2012A
2013A
%YoY
Net Interest Income
1,179
1,208
2.5%
3,655
4,782
30.8%
Other Operating Income
101
212
109.8%
330
457
38.4%
Other Operating Expense
(700)
(799)
14.1%
(2,163)
(2,871)
32.7%
438
378
-13.7%
1,419
1,752
23.4%
2
(8)
-501.6%
93
1
-99.0%
Pre Tax Profit
440
370
-15.8%
1,512
1,753
15.9%
Net Profit
349
280
-19.7%
1,193
1,376
15.3%
Loan
44,054
45,309
2.8%
35,374
45,309
28.1%
Total Assets
75,860
70,958
-6.5%
70,841
70,958
0.2%
Customer Deposits
53,492
46,874
-12.4%
47,633
46,874
-1.6%
6,405
6,684
4.4%
5,975
6,684
11.9%
Net Operating Profit
Non Operating Income(Expense)
Balance Sheet (Rp bn)
Total Equity
Key Ratios(%) (bank only)
NIM
8.0%
8.0%
8.5%
CAR
16.4%
18.7%
16.5%
LDR
82.2%
74.3%
96.7%
2.5%
2.1%
2.8%
NPL-Gross
Source: Company
NPL by Segment
Pre NPL by Segment
18%
16.40%
16%
16.80%
16%
11.30%
12%
11.10%
10%
14%
12.50%
12%
10.50%
7.40%
7.30%
8%
10%
6%
2%
18.30%
18%
14%
4%
20%
4.10%
8%
4.10%
3.00%
2.80%
0.13%
6%
0.12%
8.90%
0.11%
0%
5.60%
5.40%
5.30%
4.50%
4%
2%
2012A
Mortgage
2013A
Consumer
1Q14
Micro
Source: Company
PT Andalan Artha Advisindo Sekuritas
Commercial
0.20%
0.22%
0.22%
0%
2012A
Mortgage
2013A
Consumer
1Q14
Micro
Commercial
Source: Company
P a g e |2
Company Update | 7-May-2014
PT Bank BJB (Persero) Tbk
Loan portfolio
NPL & Coverage ratio
4%
Loan Segment
180.00%
3.80%
160.00%
4%
Mortgage, 9.10%
3%
Commercial, 13%
155.45%
140.00%
2.83%
120.00%
3%
100.00%
2.07%
2%
80.00%
82.69%
2%
79.50%
60.00%
68.50%
1.21%
Micro, 11.40%
1%
Consumer,
66.00%
40.00%
NPL ratio - Loan only
1%
LLR/NPL - Loan only
20.00%
0%
0.00%
2011A
Source: Company
Source: Company
CAR
Profitability
20%
20%
19%
19%
18%
18%
17%
17%
16%
16%
15%
15%
2012A
2013A
1Q14
25%
19.28%
21.74%
21.03%
18.70%
20%
19.40%
18.57%
15%
16.51%
16.20%
10%
5%
1.97%
2011A
2012A
2013A
2011A
2012A
2013A
ROAA
Source: Company
Source: Company
Loan and Deposit growth
Third party breakdown
Gross Loans
35.00%
Customer Deposits
28.71%
60%
56.10%
51.15%
30.00%
28.08%
50%
26.50%
25.00%
25%
40%
22.35%
20.00%
19.31%
19.20%
20%
1Q14
ROAE
31.02%
30%
1.90%
0%
1Q14
CAR
35%
1.94%
1.90%
39.85%
34.90%
30.50%
28.60%
30%
25.25%
15.00%
18.35%
20%
15%
10.00%
10%
5.00%
5%
0.00%
-1.59%
0%
-5.00%
2011A
2012A
2013A
Source: Company
PT Andalan Artha Advisindo Sekuritas
15.30%
10%
0%
Current account
Saving deposit
2012
1Q14
2013
Time deposit
1Q14
Source: Company
P a g e |3
Company Update | 7-Mei-2014
PT Bank BJB (Persero) Tbk
Financial Performance
Balance Sheet
Year-end 31 Dec (Rp bn)
Key Ratio
2012A
2013A
2014F
2015F
Year-end 31 Dec (%)
2016F
2012A
2013A
2014F
2015F
2016F
Cash
1,795
2,595
2,855
3,169
3,486
Growth
Curr. Acc. with BI
4,666
4,454
4,819
5,129
5,451
Total Assets
30.1%
0.2%
9.9%
4.3%
7.0%
290
177
152
168
185
Gross Loans
31.0%
28.1%
8.0%
7.0%
7.0%
2,912
Customer Deposits
28.7%
-1.6%
7.0%
7.0%
6.0%
Curr. Acc. with oth banks
Plac. with oth banks & BI
8,012
2,629
4,143
10,292
7,089
8,012
9,674
Net Interest Income
19.4%
30.8%
7.4%
3.8%
9.9%
35,374
45,309
48,933
52,359
56,024
Pre-Prov Operating Profit
12.8%
29.9%
5.5%
-6.0%
3.5%
(1,625)
Net Income
24.0%
15.3%
-5.1%
0.6%
1.8%
Marketable securities
Loans
Less: Allowance
(606)
Syaria financing - net
(1,020)
2,486
(1,370)
2,838
(1,492)
2,880
3,532
3,937
4,380
735
699
756
826
921
ROAA
1.9%
1.9%
1.8%
1.6%
1.6%
Other
13,551
2,291
8,331
5,928
5,148
ROAE
21.0%
21.7%
18.6%
17.1%
16.0%
Total Assets
70,841
70,958
77,988
81,316
86,989
Net Interest Margin (NIM)
8.0%
8.5%
8.2%
8.2%
8.3%
Cost to Income Ratio
54.3%
54.8%
55.1%
59.6%
61.9%
BOPO
79.0%
79.6%
82.7%
83.5%
84.4%
CAR
18.7%
16.5%
17.8%
18.0%
18.0%
Loans/Deposits
74.3%
96.7%
97.6%
97.6%
98.5%
NPL ratio - Loan only
2.1%
2.8%
2.5%
2.6%
2.5%
LLR/NPL - Loan only
82.7%
79.5%
114.3%
107.9%
113.9%
Net Charge Off Rate
0.8%
0.3%
1.0%
1.0%
1.0%
Prov. exp/Loan&Financing
1.1%
1.3%
1.6%
1.2%
1.2%
9,696
9,696
9,696
9,696
9,696
Fixed assets
Customer deposit
47,633
46,874
50,155
53,666
56,886
231
324
328
356
386
2,395
2,397
7,340
5,312
5,683
11,506
11,302
9,124
9,911
10,894
Borrowing
Securities issued
Other
Total Liabilities
61,765
Minority Interest
Shareholders Equity
Total Liabilities & Equity
4,813
Operational/Profitability
60,897
66,948
69,245
73,849
34
34
35
37
38
5,975
6,684
7,328
8,026
8,732
70,841
70,958
77,988
81,316
86,989
Source : Company, AAA Securities
Assets Quality/Capital
Per Share Data
Income Statement
Year-end 31Dec (Rp Bn)
No. of Shares (in Mn)
2012A
2013A 2014F
2015F
2016F
EPS
Interest income
6,796
8,133
8,988
9,500
10,192
Payout
Interest expense
(3,140)
(3,351)
(3,853)
(4,168)
(4,330)
DPS
3,655
4,782
5,136
5,333
5,862
Net interest income
Other operating income
123
142
134
135
138
55.66%
48.00%
47.00%
48.00%
48.00%
68
68
63
65
66
Source : Company, AAA Securities
330
457
422
483
518
Other operating expense
(2,163)
(2,871)
(3,060)
(3,469)
(3,952)
Pre prov operating profit
1,823
2,368
2,498
2,347
2,429
Return on Average Equity
Prov expense
(403)
(616)
(867)
(706)
(757)
Equity multiplier
Net operating profit
1,419
1,752
1,631
1,641
1,672
Pre Tax Return on Avg Ast
93
1
1
1
1
Profit before tax
1,512
1,753
1,632
1,643
1,673
16.5%
16.0%
13.9%
13.2%
12.5%
Tax
(319)
(376)
(326)
(329)
(335)
+ Int exp rat
-43.5%
-39.0%
-40.9%
-41.7%
-40.4%
Net profit
1,193
1,376
1,306
1,314
1,338
+ Non int exp rat
-29.9%
-33.4%
-32.5%
-34.7%
-36.9%
+ Loan provision
-5.5%
-7.2%
-9.2%
-7.1%
-7.1%
+ Tax Ratio
-4.4%
-4.4%
-3.5%
-3.3%
-3.1%
Total Inc/Avg Ast
11.5%
12.1%
12.6%
12.5%
12.7%
+ Int inc/Avg Ast
10.8%
11.5%
12.1%
11.9%
12.1%
Non operating inc - net
Source : Company, AAA Securities
Dupont Model
2012A
21.0%
2013A
21.7%
2014F
18.6%
2015F
17.1%
2016F
16.0%
1103.9% 1120.1% 1063.0% 1037.5% 1004.3%
Tax Effect
Net Income/Ttl Inc
2.4%
2.5%
2.2%
2.1%
2.0%
78.9%
78.5%
80.0%
80.0%
80.0%
+ Non int inc/Avg Ast
0.7%
0.6%
0.6%
0.6%
0.6%
Return on Average Equity
21.0%
21.7%
18.6%
17.1%
16.0%
Source : Company, AAA Securities
PT Andalan Artha Advisindo Sekuritas
P a g e |4
Company Update | 7-Mei-2014
PT Bank BJB (Persero) Tbk
PT Andalan Artha Advisindo Sekuritas
(Member of Indonesia Stock Exchange)
General :+62-21-2991 6600
 Investment Banking : +62-21-2991 6688
 Fixed Income Dealing :+62-21-2991 6666
 Equity Dealing :+62-21-2991 6700
22/F Equity Tower Building
Jalan Jenderal Sudirman Kav. 52-53
Jakarta 12190, Indonesia
Facsimile:+62-21-5152266
E-mail: [email protected]
INVESTMENT RATINGS
Buy: Expected positive total returns of 10% or more over the next 12 months
Hold: Expected total returns of between -10% and +10% over the next 12 months
Sell: Expected negative total returns of 10% or more over the next 12 months.
DISCLAIMER: The information contained herein has been compiled from sources that we believe to be reliable. No warranty (express or implied) is made to
the accuracy or completeness of the information. All opinions and estimates included in this report constitute our judgment as of this date, without regards
to its fairness, and are subject to change without notice. This document has been prepared for general information only, without regards to the specific
objectives, financial situation and needs of any particular person who may receive it. No responsibility or liability whatsoever or howsoever arising is
accepted in relation to the contents hereof by any company mentioned herein, or any their respective directors, officers or employees. This document is
not an offer to sell or a solicitation to buy any securities. This firms and its affiliates and their officers and employees may have a position, make markets,
act as principal or engage in transaction in securities or related investments of any company mentioned herein, may perform services for or solicit business
from any company mentioned herein, and may have acted upon or used any of the recommendations herein before they have been provided to you.
Available only to person having professional experience in matters relating to investments. © PT Andalan Artha Advisindo Sekuritas 2013.
PT Andalan Artha Advisindo Sekuritas
P a g e |5