Dec 14, 2018
- For 4Q18, we expect Bank Central Asia (BBCA) to post earnings of IDR7,103.4bn (+0.2% QoQ, +9.8% YoY), driven by improving net interest margin (NIM), solid loan growth, and flat provisioning.
- In November 2018, BBCA’s loan growth (bank only) reached 18.8%, mostly driven by the corporate segment, thanks to the bank’s attractive lending rate and higher liquidity relative to peers. We believe this trend continued through end-2018 and expect it to last into 2019. We also expect NIM to improve in 4Q18, given the high CASA ratio and increasing lending rate. For 2019, we look for NIM improvement but slower loan growth compared to 2018.
- We think investors should view the change in earnings driver from lower provisions to growing NII as a positive signal. BBCA’s core earnings have grown at the second fastest pace after BBNI. We think the spread of corporate bond yields and lending yields and BI’s rate upcycle should continue to support core earnings growth.
- We reiterate our Trading Buy recommendation on BBCA and retain our target price of IDR30,000. Our target price implies a P/B of 4.3x our 12-month rolling forward BPS estimate.
(See full report: https://goo.gl/6tefgc)
Tidak ada komentar:
Posting Komentar