CIMB Bank Rakyat Indonesia Company update - A lesser worry

(BBRI IJ / BBRI.JK, OUTPERFORM - Maintained, Rp6,650 - Tgt. Rp7,000, Financial Services)

BRI has slowed down its KUR loan disbursements, especially in areas where its KUR NPL ratios have hit the threshold. Concurrently, the bank has migrated 106,000 eligible KUR borrowers to its normal unsubsidised micro product, Kupedes. The KUR programme is being used by BRI as a tool to filter out quality borrowers from the riskier part of the micro segment. BRI's recent restraint in KUR loans signifies intact risk management. We maintain our Outperform rating and DDM-based target price of Rp7,000.