Macquarie Bank Danamon: BIG correction on special mention loan figure

When BDMN had its analyst meeting on 23 April, the bank showed an alarming 44% q-o-q increase in special mention loans, from Rp5,398bn (Dec-08) to Rp7,805bn (Mar-09). The figure has caused some concerns, as it implies that in just one quarter, about 20% of BDMN’s corporate loan book (or Rp1,921bn) had received special mention status.

Yesterday, BDMN amended the presentation with a corrected special mention loan figure of just Rp5,978bn, 23% lower than the earlier reported figure. The company made a mistake calculating the Mar-09 special mention loan number the first time, by including category 3, 4, and 5 loans. The corrected figure implies only Rp132bn corporate loans became special mention in 1Q09, as opposed to an earlier (much more alarming) figure of Rp1,921bn.

Since the analyst meeting, BDMN share price has corrected by 3% while the JCI bank index was flat. Macquarie rates BDMN as Outperform with PxT of Rp3,750, with the stock trading on 12.1x and 8.2x FY09-10 P/E and 1.4x FY09 P/BV.