KimEng Bank Negara Indonesia (BBNI IJ): BUY - New accounting rule boosts bottom line

We raise our FY10F earnings estimate on Bank Negara Indonesia (BNI) after taking into account the Rp690b reduction on allowance for loan losses. Our adjustments resulted in a 52% y/y jump in FY10F profit to Rp3.8t. Loan growth, however, remains the main risk to our valuation. We raise our target price for BNI to Rp2,900 (FY10F 11.7x PER, 2.0x PBV) to reflect our higher earnings estimate. Accordingly, we upgrade our recommendation to BUY.