Stronger than Expected Loan
Key Takeaways:
▪️ Net profit reached IDR14tn in 2Q24, marking a 9% increase QoQ and bringing 1H24 NPAT to IDR26.9tn (+11% YoY). This growth was driven by robust loan and net interest margin (NIM) expansion, alongside effective cost management, with a PPOP increase of 5% QoQ (+10% YoY) and improved Cost-Income Ratio (CIR) at 29.1% in 2Q24.
▪️ NIM Expansion and Loan Growth: The bank reported a NIM of 5.8% in 2Q24, up 20bps QoQ, supported by higher LDR and competitive asset yields. Loan growth was strong at +15.5% YoY in 1H24, driven by robust performance in the corporate segment, particularly in sectors like mineral and downstreaming. Management maintains 9%-10% loan growth target for FY24E (NIM at 5.5%-5.6%)
▪️ Asset Quality and Outlook: Despite challenges, the bank managed a manageable CoC of 0.3% in 1H24 amid higher NPL at 2.2% in 2Q24. Efforts to reduce the LAR ratio continued, achieving 6.4% in 1H24. Looking forward, management expects continued demand for corporate loans in 3Q24. We maintain our call BUY with a target price of IDR11,600 which implies 5.1x/4.7x PBV FY24E/FY25F.
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