Quick Takes – Bank Rakyat Indonesia – Green light from the government?
Indonesia’s SOE Minister recently summoned state bankers to a discussion on capital issues. We see at least three options for BRI to improve its capital position: issuing subordinated debt, rights, or cutting dividends temporarily. The latter could be the most likely option, in our view. Nevertheless, we do not view it negatively, as we believe a temporary cut could eventually bring more loan growth as compensation. The stock unperformed its peers in the past 1.5 weeks. We see an opportunity to accumulate and maintain Outperform on BRI with an unchanged DDM-based target price of Rp5,250.
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