NISP Bank BCA records 18.3% YoY growth in 1Q10 net income (BBCA, Rp5,450)

• During 1Q10 BCA posts Rp1.9tn of net income, 18.3% YoY higher from Rp1.6tn in 1Q09. The figure came in at 23.8% of the consensus’s full year expectation of Rp8.0tn. Such increase in revenue was mostly driven by a reversal in provision expense of Rp303bn compared to a provisioning of Rp863bn in 1Q09.

• The company’s net interest income decreased by 25.2% YoY to Rp2.9tn from Rp3.8tn in 1Q09 due to new accounting standard that requires the bank to post interest income from SBI (trading account) in other income. As such, the bank’s other operating income rose to Rp1.9tn, 87.1% YoY higher from Rp1.0tn in 1Q09.

• The bank’s loans grew by 12.7% YoY to Rp120.9tn and BCA managed to improve its loans quality where NPL decreased to 0.8% in 1Q10 from 1.6% a year earlier.

• Meanwhile, TPF rose by 15.6% YoY to Rp242.2tn, mostly driven by growth in saving deposits that rose by Rp12tn to Rp122.3tn (+11.1% YoY) and time deposits that rose to Rp66.3tn from Rp54.0tn or increased by 23.0% YoY.

• The bank’s NIM decreased to 5.5% from 7.0% amid lower interest rate condition
that lowered the bank’s yield on assets.

• BBCA is trading at 2010F consensus PER of 16.7x and PBV of 4.2x.