Company

Asia ASEAN Indonesia Banking/Finance

11 Mar 2011 - 11:07:55 AM GMT

Global Markets Research

COMPANY ALERT
Bank BJB
FY10 results - Below forecasts
Price (IDR) Price target (IDR) 52-week range (IDR) Market cap (USDm) Shares outstanding (m) NPL/total loans (%) Price/book (x) 1,140 2,100 1,770.00 900.00 1,259 9,696 2.3 2.2

Results Buy
Reuters:BJBR.JK Exchange:JKT Ticker:BJBR

FYE 12/31 Provisioning (IDRbn) Pre-prov profit (IDRbn) EPS (IDR) PER (x) Yield (net) (%)

2009A 160.2 1,115

2010E 435.8 1,824

2011E 471.5 2,028

111.92

107.35 10.6 3.2

120.40 9.5 4.7

BJB has released its FY10 results. NP of Rp890bn (+26% yoy) came in short of our FY10F projection of Rp1.0tr. The bank cited that this is due to the implementation of the new accounting rules (PSAK 50 and 55), which resulted into adjustment of interest income recognition. The weighted average ROAE stands at 24.95%, while NIM is at 7.3% (vs 7.7% in 2009). At the operating level, the bank booked loans of Rp23.7tr (+20.6% yoy), while deposits rose to Rp32.0tr (+34.7% yoy). This implies LDR of 74.1%. As of FY10, consumer loans accounted for 72.7% of total loan book; followed by micro loans for 10.7%, and commercial loans for 16.6%. Gross NPL is at Rp440bn, which is down from Rp560bn in 2009. This implies NPL of 1.9% (down from 2.0% in 2009). As of FY10, CAR stood at 22.9% - making BJB one of the well capitalised banks. Going into 2011, the bank projects FY11 NP of Rp1.1tr (+27% yoy) - aggressive but not unrealistic, in our view. Also, it aims for loan and deposit growth of 30% and 20% respectively. It targets micro loan to be 20% of total loan books (vs 11% in 2010), consumers at 65% (vs 73%) and commercial at 16% (vs 17%). At this pace of growth, we estimate implied LDR would be 80%. Despite the weak results, we retain our Buy recommendation as we believe BJB should still deliver one of the highest ROAE of over 20% with CAR of over 20%.
BJB - FY10 earnings

Source: Deutsche Bank and company data

Raymond Kosasih, CFA

Arinta Harsono
PT Deutsche Bank Verdhana Indonesia Research Analyst (+62) 21 318 9519 arinta.harsono@db.com

PT Deutsche Bank Verdhana Indonesia Research Analyst (+62) 21 318 9525 raymond.kosasih@db.com

Deutsche Bank AG/Hong Kong

This research has been prepared in association with PT Deutsche Bank Verdhana Indonesia. The opinions contained in this report are those of PT Deutsche Bank Verdhana Indonesia. All prices are those current at the end of the previous trading session unless otherwise indicated. Prices are sourced from local exchanges via Reuters, Bloomberg and other vendors. Data is sourced from Deutsche Bank and subject companies. Deutsche Bank does and seeks to do business with companies covered in its research reports. Thus, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. THE VIEWS EXPRESSED ABOVE ACCURATELY REFLECT PERSONAL VIEWS OF THE AUTHORS ABOUT THE SUBJECT COMPANY(IES) AND ITS(THEIR) SECURITIES. THEY HAVE NOT AND WILL NOT RECEIVE ANY COMPENSATION FOR PROVIDING A SPECIFIC RECOMMENDATION OR VIEW IN THIS REPORT. FOR OTHER DISCLOSURES PLEASE VISIT HTTP:// GM.DB.COM MICA(P) 007/05/2010