PAT better than expected on lower provisioning: BRI’s FY09 net profit of Rp7.3T was 6% higher than our forecast. PPOP was in line with estimates (down 24% q/q), while lower provisioning and a decline in loan loss coverage in 4Q to 157% drove the better-than-expected profit.
29% q/q jump in FX loans extended depresses margins: Bucking the sector trend, BRI saw a 6bp q/q decline in NIM in 4Q FY09. Rupiah loan margins expanded. However 7% q/q loan growth (27% y/y) was driven by a sharp 29% q/q expansion in forex-denominated credit which suppressed margins.
4Q FY09 NPLs down to 3.5%: BRI’s NPL ratio improved to 3.5% in 4Q FY09 (from 3.9% in 3Q). NPLs declined by Rp295B, despite writeoffs of Rp2.4T (1.2% of loans) in 4Q, suggesting underlying credit quality remains vulnerable. The lower NPL ratio is also influenced by BRI’s strong 27% y/y loan growth. On the positive side, broad NPLs
declined 88bp q/q, pointing to an easing in pipeline NPLs.
Customer acquisition trends still uninspiring: These results did not assuage our key medium-term concerns on BRI. Core Micro loans have declined from 29% of loans in 2007 to 25% currently, and Micro loan growth continues to be driven by loan ticket size, which was up 15.5% y/y in 4Q. BRI grew micro customers by 47,000 in 4Q, which included a migration of 70,000 KUR borrowers to regular micro loans, indicating
that customer acquisition remains an issue in the core business.
Stock has rallied on flows; opportunity to sell: BRI is up 15% in the last month after a period of sustained underperformance, but has lagged the other banks in the rally. Given weak underlying trends, we do not see outperformance as sustainable and reiterate our UW rating with a Rp7,000 Dec-10 DDM-based PT.
Tidak ada komentar:
Posting Komentar