BBNI is off to a fine start in 2025. In this note, we look into its bank-only Jan-25 results, which demonstrate flat operating results. Understandably, monthly bank results can be volatile; thus, we think y-y assessments would be more appropriate. We also think assessing the long-term trends should offer more insights into the bank’s progression on improving yields and repricing. Post the results, we reiterate our Buy rating on the stock with an unchanged TP of IDR6,250.
Bank-only Jan-25 results summary
Net interest income stood at IDR3.2tn (-18% m-m, +2% y-y), primarily from: 1) higher gross interest income of IDR5.5tn (+4% y-y), and 2) lower credit costs of 80bp (vs 110bp in Jan-24). Meanwhile, PPOP remains relatively flat at IDR2.5tn (-24% m-m; +1% y-y). The decline in PPOP m-m can be attributed to normalization from the peak season in December. Bank-only net profit reached IDR1.6tn (+17% m-m; +10% y-y) due to lower CoC, otherwise it could have possibly been flat. Overall, the implied balance sheet ROAA stood at 1.8%, with balance sheet ROAE of 12.3%.
On the balance sheet, BBNI booked loan growth of 10% y-y while deposits remained relatively flat at -0.1% y-y, with the decline coming mostly from Current Account (CA), resulting in a CASA ratio of 70.7% and an LDR ratio of 97%.
Valuation and risks
Our TP of IDR6,250 is based on a DuPont analysis, assuming a risk-free rate of 6.5%, an equity risk premium of 7.8%, growth of 8.5%, beta 1.0x and a CAR-adjusted ROAE of 16.5%. We also use 2025F book as reference. The implied multiples at our TP are 1.3x 2025F book and 10.6x 2025F earnings (compared with current multiples of 1.0x and 8.1x, respectively). Key risks to our view are worsening macroeconomic trends, unfavorable regulatory changes, and tighter liquidity competition (which would increase funding cost), and worsening credit quality (which would raise credit costs), and higher opex.
