Mandiri Sekuritas Bank Rakyat Indonesia: 1H10 results below our expectation and consensus estimates (BBRI, Rp10,050 Buy, Rp12,000)

􀂄 Bank Rakyat Indonesia recorded a net profit of Rp4.3tn (+22.8% yoy) in 1H10, which was below our expectation and consensus estimates.
􀂄 The bank reported higher than expected provisioning/impairment expenses as its NPL increased to 4.3% at end Jun10 from 4.1% at end Mar10.
􀂄 The bank’s loan growth remained strong at 8.6% qoq or 24.0% yoy to Rp230.5tn, thus bringing its LDR to 88.4% at end Jun10 vs 87.0% at end Mar10.
􀂄 At present, BRI is trading at 2010F P/BV of 2.8x and PER of 9.4x. We maintained our buy recommendation on the counter.