Mandiri Sekuritas BBTN: 1Q10 results in line with our expectation and consensus (BBTN, Rp1,450, Buy, TP: Rp1,200)

􀂄 BTN recorded a net profit of Rp188bn (+71.6% yoy) in 1Q10, which was inline with our expectation and consensus estimates.

􀂄 The bank actually recorded higher than expected net interest income,msupported by lower interest expenses. This led to a high NIM of 5.6% in 1Q09 compared with 4.7% for FY09. Such strong NIM was supported by strong growth in loans (+28.6% yoy to Rp43.1 tn at end Mar10), which is dominated by housing loans (93% of total loans). Meanwhile, fee based income also grew high at 136.8% yoy to Rp266bn in 1Q10. S

􀂄 Such strong performance in NII and fee based income allowed the increase in provisioning expenses to Rp107 bn in 1Q10 from Rp3 bn in 1Q09). Such high provisioning expenses was partly to cover higher NPL recorded in 1Q10 of 4.0% at end Mar10 compared with 3.4% at end Dec09.

􀂄 At present, BTN is trading at 2010F P/BV of 2.1x and PER ofr 14.0x. We are reviewing our forecast on the bank. For the time being, we maintained our buy recommendation on the counter.