Mandiri Sekuritas Bank Rakyat Indonesia: FY09 results above our expectation and consensus estimates (BBRI, Rp8,250 Buy, Rp8,700)

􀂄 Bank Rakyat Indonesia recorded a net profit of Rp7.3tn (+22.7% yoy) in 2009, which was above our expectation and consensus estimates.

􀂄 The bank reported higher than expected fee based income, mainly derived from fees and commissions charged to its customers.

􀂄 Meanwhile, NIM declined to 9.1% in 2009 from 10.2% in 2008, partly attributed to strong growth in time deposits during the year (CASA proportion declined from 63.5% in 2008 to 60.6% in 2009) which led to a higher increase in interest expense compared to interest income (44.4% yoy vs. 24.9% yoy).

􀂄 During the analyst meeting yesterday, the management mentioned about the targeted loan growth of 20-25% yoy this year and expected improvement in CASA proportion, supported by full online system effective Nov09. Despite that, the bank only targets NIM to maintain between 8.5% -9.5%.

􀂄 At present, BRI is trading at 2010F P/BV of 3.1x and PER of 13.0x. We maintained our buy recommendation on the counter.