Wealthy, healthy
NPL antidote & loan growth support: IDR34t in 2010 capital raising
In an effort to support loan growth and comply with the implementation of the Basel II accord, many Indonesian banks are continuing building up their capital bases by way of share issuances and/or lowering dividend payouts. These capital raisings will also allow banks to better withstand shocks from souring loans. Although BI currently imposes minimum CAR of only 8%, the recent RR rulings encourage higher CARs of up to 14%, particularly for banks with high LDRs. Ironically, big banks like BBCA, BMRI, BBNI and BBRI have, as of end July 2010, fallen behind the industry’s average CAR of 18.3% (exhibit 10). This is because banks with higher CARs have raised approximately IDR11.5t via IPOs, rights issues and subordinated debts. Not to be left behind, big banks with lower CARs are implementing rights issue or issuing subordinated debts going forward. Thus, there will be some IDR34t in fund raising this year, of which only 15% have been completed (exhibit 8).
BBNI: IDR9-11t rights issue = New TPs ranging IDR4,700-5,000
With the parliament’s approval, BBNI will pursue a rights issue in 4Q10, concurrently expanding its free float to 40.0% from the current 26.7%. The bank aims total fund raising in the vicinity of between IDR9-11t, assuming a rights price of between IDR2,700-3,300 and additional 3.4b new shares, representing 22.1% of enlarged capital. We believe that this rights issue should be deployed to augment the bank’s capital base in an effort to support its loan expansion and increase CAR to 18-19% from 12.8% previously estimated. Post rights issue, the management targets a near doubling in loan growth to a minimum of 20%. The 5% tax savings from the enlarged free float coupled with additional earnings support arising from the capital raising should help the bank to continue posting strong earnings growth, minimizing EPS dilution from the rights issue in our view. Our sensitively analysis suggests BBNI’s fair value post rights to increase from IDR4,250 to between IDR4,700-5,000 (exhibit 6), based on 2011 P/BV of 2.6x or 26% discount to the industry’s average P/BV of 3.5x.
BMRI: IDR12-14t rights issue = New TPs ranging IDR8,100-8,400
Similarly, BMRI is optimistic that its upcoming rights issue would raise approximately IDR12-14t worth of capital, taking into account the bank’s free float expansion to 40.0% from the current 33.2% through the divestment of the government’s stake in BMRI. Subsequently, this would increase the bank’s CAR from 12.9% to 17-19% post rights issue, eliminating concerns over longer-term growth sustainability for BMRI. Our back-of-the-envelope calculation suggests BMRI’s fair value post rights issue to range between IDR8,100-8,400 from our current target price of IDR7,250
Tidak ada komentar:
Posting Komentar