BBCA just released its bank-only Feb-25 results. Given that February is shorter than other months, typical monthly interest income or expenses for Feb are lower (assuming no changes in rates). For this reason, in this note, we look at YTD Feb-25 results for BBCA. Overall, we think YTD Feb25 results continue to show stable trends despite still challenging macroeconomic trends.
For YTD Feb-25, the bank booked headline profit of IDR9.0trn+8% y-y) and PPOP of IDR11.7tn (+9% y-y). We believe this would be the y-y highest profit growth among major banks. We attribute this to:
1. Stable NIM of 5.7% (+10bp y-y) largely driven by slightly higher asset yields of 6.6% (+10bp y-y), and steady (and lowest) funding costs of 1.07% (-4bp y-y); and
2. Steady credit costs of 40bp (flat y-y) reflecting healthy asset quality that the bank has maintained.
YTD Feb-25 the bank saw a 12MMA write-off (WO) rate of ~20bp (down from ~40bp a year ago). This resulted in steady credit costs (CoC), with implied 12MMA CoC of ~20bp (largely flat y-y).
On the balance sheet, the bank booked loan and deposit growth of +14% y-y (+1% YTD) and +4% y-y (+1% YTD), respectively, which brought LDR to 80% (+700bp y-y / flat m-m). We expect loan growth to moderate in subsequent months toward 6-8% for FY25F (in line with management guidance).A kKey observation on deposit growth is that it suggests high-quality growth coming from savings products, which rose +6% y-y (and +3% YTD). This resulted in a CASA ratio of ~82% (+100bp y-y). On LLR, management maintained its prudent stance with a stable LLR of 3.6%.
Post results, BBCA remains our preferred banking stock.
Valuation and risks
We derive our TP of IDR12,600 using DuPont analysis with key parameters as follows: a risk-free rate of 6.5%, an equity risk premium of 7.8%, beta of 0.8x and a CAR-adjusted ROAE of 24.5%. Our TP implies 5.4x FY25F P/B (vs current price valuation of 4.2x) and 26.0x FY25F P/E (vs current price valuation of 21.0x). Risks are worsening economic trends, tighter liquidity competition, and/or higher credit cost and opex growth.
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