Analisa Saham BBRI | 27 Desember 2017

Analisa Saham BBRI

Mandiri (CC) 27 Dec 2017

BBRI BUY TP 3600

Bank BRI: 11M17 Results - In line (BBRI; Rp3,460; Buy; TP Rp3,600)

BBRI reported Rp25.3tr unconsolidated net profit in 11M17, +9% y-y, accounting for 90% of FY17 consensus and
89% of our expectations. PPOP growth was strong at 17% y-y, driven by operating income growth of +10% y-y and
managed opex which only increased +1% y-y. However, provision expenses increased 44%yoy, dragging down net profit
growth. We estimate the consolidated net profit of Rp25.8tr using the 98% proxy of unconsolidated profit to consolidated
one in 9M17. This accounts for 91%/91% of consensus and our FY expectations— within expectations. The bank recorded
net profit of Rp2.6tr in Nov-17, +13% y-y/1% m-m.

Loan growth slowed at +9% y-y (+1% m-m), deposit growth +8% y-y (+2% m-m). Deposit growth was driven by
savings deposits at +15% y-y, followed by demand and time deposits, at +3% y-y and +4% y-y. CASA contribution to total
deposits increased to 59% in Nov-17, compared to 57% in Nov-16 while LDR was at 91% in Nov-17 flat.

NIM weakened to 7.9% in 11M17 from 8.2% in 11M16 on declining asset yield. On the monthly basis, NIM declined to
6.9% in Nov-17 from 7.5% in Oct-17 and cost of funds declined to 2.9% in Nov-17 vs. 3.9% in Oct-17, the second lowest
monthly CoF this year with 2.8% recorded in Feb-17.

Cost to income ratio improved to 40% in 11M17 from 44% in 11M16.

Provisioning expenses increased +44% y-y to Rp16.9tn in 11M17. Mansek estimates BBRI wrote off ca. Rp7.9tr of bad
debts in 11M17 vs. Rp6.8tr in 11M16. Annualized cost of credit was at 2.7% in Nov-17 vs. 2.0% in Nov-16 while
provisioning to total loans increased to 4.5% in Nov-17 from 3.4% in Nov-16. We expect BRI to book to more provisioning
charges this year than in 2016.

Maintain Buy call with TP of Rp3,600. The counter is trading at 2.6x P/BV for 2017F and 2.2x for 2018F.