BBNI’s Stock Being Suppressed As Gross NPL Rises

Stock price of PT Bank BBNI Tbk (BBNI) was hit by selloff after the company released the first semester financial report of 2016 last weekend. BBNI’s gross non-performing loan (NPL) ratio reached 3% due to downgrading credit to PT Trikomsel Tbk (TRIO) and allegedly causing investors to sell their shares. Several securities recommended hold on BBNI’s share.

BBNI’s financial report on the second quarter of 2016 showed that gross NPL went up 20 basis points from 2.8% in the first quarter to 3%. BBNI’s total NPL reached Rp 2.8 trillion; mostly contributed as credit to TRIO amounting to Rp 1.3 trillion. The management of BBNI said the second quarter of 2016 is the peak of this year’s NPL where it is expected to subside gradually. The company doubled its reserves to Rp 3.3 trillion to minimize risk of worsening NPL.

PT Samuel Sekuritas Indonesia assessed the pressure on BBNI’s asset quality will remain apparent until the third quarter of 2016. However, the performance of BBNI in general is relatively robust with 24% credit growth (YOY) to Rp 357.22 trillion. The bank’s net profit surged 79.9% to Rp 4.27 trillion but only reached 39% of the expected amount of Samuel Sekuritas’ net profit. Therefore, Samuel Sekuritas recommended hold on BBNI’s stock with target price of Rp 5,500.

PT Bahana Securities also recommended hold on BBNI’s stock with target price of Rp 6,000. In the first session of Monday’s trade (7/25), BBNI’s stock price sank 1.9% to Rp 5,200. (*)