Analisa Saham BBTN | 10 September 2018

BBTN
Strengthen the leadership in subsidized mortgage loan

Shinhan Sekuritas Indonesia
Helmi Therik

Back ground. BBTN is a state owned company that focuses in the mortgage loan. The underpenetrated mortgage loan in Indonesia at 2.9% of GDP compares to Asia (>20%) is the backdrop of the industry that provide the opportunity for BBTN to grow further. Total BBTN market shares in mortgage loan is about 37.7%, while in term of government subsidized mortgage loan, the company is the leader with the shares of 94%. The total deposit share is about 3.6% of the national deposit while in the loan, the shares is at 4% of the total national loan. 

Strategic position to support government program. We overweight the company given its position as a strategic in the mortgage loan that get the support from the government program in housing program. The government has budgeted IDR6tn for housing subsidies. The demand for the mid to low market is ample given the large housing backlog in Indonesia at 11.6mn unit. However in the other side the slightly hawkish tone in monetary policy as shown in the higher policy rate due to the macro prudential reason would be the challenge for the mortgage. However, we see the positive side from the relaxation in the LTV which would counter the negative side that could increase the accessibility for the mid to low income segment and the first buyer. The mortgage loan requires the availability of the stable and long term funding. With the current LDR at above 100%, the company will relies on the whole sale funding such as bond issuance or mortgage securitization with the higher cost  and the increasing of the third party fund with the lower cost to match the assets liability. This has made the NIM of the BBTN is slightly lower (4%) than the other SOE bank (>5%). The assets quality remains sound as the ratio of the NPL to collateralize value was at 274.9%. 

Solid loan growth. The company posted a satisfactory loan growth in the 1H at 19.14%yoy to IDR211.35tn on the back of the acceleration of the mortgage that contributes 56% of the total loan while the non housing loan increased by 14.9%yoy. The acceleration of the third party fund especially from the CASA that picked up by 19.17% has supported the growth. We expect the company would be able to book a loan growth at 19% while the NIM and cost of fund is estimated 4% and 4.2% respectively this year. 

Risk. The unanticipated of the downward in credit quality, stiffer interest rate competition, slower GDP that could slash down the earning outlook.

Valuation.  We drive our TP 3800 based on GGM which implying the PBV at 1.6x and 1.4x for 2018F and 2019F respectively. The CoE and the ROAE is calculated at 15% and 13.3%.