Mandiri Sekuritas Bank Central Asia: FY09 results in line with our expectation and consensus (BBCA, Rp5,700, Neutral, TP: Rp5,400)

􀂄 Bank Central Asia recorded a net profit of Rp6.8tn (+17.9% yoy) in FY09, which was inline with our expectation and consensus estimates.

􀂄 The bank actually recorded higher than expected operating expenses, however as it booked lower provisioning expenses, the bottom line is about in line with our expectation.

􀂄 It is worth noting that the bank recorded strong loan growth in 4Q09 of 9.9% qoq, with loans to commercial segment posted the highest growth of 13.1% yoy. Coupled with the decline in absolute amount of NPL in 4Q09 (-36.7% qoq), such strong growth in loans supported the decline in NPL to 0.7% at end Dec09 from 1.3% at end Sep09.

􀂄 At present, Bank Central Asia is trading at 2010F P/BV of 4.2x and PER of 16.7x. As the bank’s share price has already exceeded our target price, we changed our recommendation to neutral.