Net Profit Rises, Recommendation: BUY BBNI

Bank BNI Tbk (BBNI) net profit rose 30% to IDR 5.72 trillion until last August. The decreasing provision in August by 67% month to month shows a lesser pressure on credit asset quality so the target of IDR 10.59 trillion might be achieved.

Samuel Sekuritas Indonesia expects that there will be no additional provision fund that is significant by the end of this year. BBNI has the potential to add IDR 1 trillion per month for net profit which reached 54% from target of FY2016.

The company performance is supported by net interest income growth that is relatively stable by 13.2% yoy and loan growth of 23% yoy. Its performance will be relatively well and the loan growth is approximately by 18%, higher than average of 7%-9%.
But, the investors have to watch closely on BBNI’s loan disbursement plan to Visi Media Asia Tbk (VIVA). The loan of IDR 1.57 trillion will be used for TV One and ANTV debt refinancing. The loan from BBNI is IDR 900 billion, Bank Rakyat Indonesia Tbk (BBRI) IDR 500 billion, BPD Sumsel Babel IDR 100 billion, and BPD Jambi IDR 75
billion. The loan syndication shows a risk that will be borne along with the banks that give syndication.

According to sensitivity analysis that has been done by Samuel Sekuritas, if the loan of IDR 900 billion is default by next year, the non-performing loan (NPL) will rise 0.2% and its net profit will be lower by 7%, and its target price will be 3% lower than the current target.

Samuel Sekuritas recommended BUY for BBNI with a target price of IDR 6.300. (*)