DBS Bank Rakyat Indonesia: Buy; Rp9,950; TP Rp11,100

Acquisition on AGRO materializes
BBRI reported that it may spend Rp200bn to buy an 80% stake in Bank Agroniaga by end August. We believe the key rationale is for BBRI to further entrench its lead in agro-based lending, which would also complement its current microlending business. We view the acquisition neutral to mildly positive as Bank Agroniaga is a comparatively small bank with total assets less than 1% of BBRI's total assets.