MacQ Bank Rakyat Indonesia

Bank Rakyat Indo: another update from Ferry

Ferry Wong (analyst) met with the investor relations team at BRI. Nothing much to add from the conference call we hosted last week. Key take-aways:

NPL inched up to above 3% in Feb ’09, vs. 2.9% per Sept-08, vs. Macq forecast of 3.7% NPL for FY09.
No lending to Lapindo victims. The reason that PT Minarak Lapindo changed its appointed bank from Mandiri to BRI was mainly because of BRI’s stronger branch numbers, and the majority has an account with BRI.
KUR loan going well. NPL remained low (overall NPL for KUR at 0.84% as of Dec-2008, vs. bank industry NPL at 3.8%.
Some of the KUR’s customers (about Rp300-400b) have become BRI’s micro segment customers following their repayment of KUR’s loan (9-15 mo program per customer).
BRI will expand about 600 micro retail outlets this year (to be called Teras BRI) to focus more on the wet market/traditional market.

Ferry re-iterates Outperform rating on BRI as he thinks the bank will benefit from lower interest rate, government projects, and the government’s micro and SME loans program. The stock is on 2009 P/BV of 2.1x, ROE of 29%, and 6.5% div yield.