Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

Bank Negara Indonesia Persero / Equity Bottom-Up

<ul>
<li>Negara’s attractive valuations, its low PEG ratio, its improving returns and efficiency ratio stand out; pre- and post-provision returns edged higher, combined with high NPL coverage and healthy CET1 ratio</li>
<li>We remain positive on Mandiri for its attractive PE multiples, its premium returns, and its robust credit quality metrics; Mandiri has the second-best efficiency ratio after mega-cap Bank Central Asia</li>
<li>Rakyat’s high structural cost of risk continues to weigh on its pre- and post-provision returns, with the latter being eroded further to 3Q24</li>
</ul>


Negara’s attractive valuations, its low PEG ratio, its improving returns and efficiency ratio stand out; pre- and post-provision returns edged higher, combined with high NPL coverage and healthy CET1 ratio
We remain positive on Mandiri for its attractive PE multiples, its premium returns, and its robust credit quality metrics; Mandiri has the second-best efficiency ratio after mega-cap Bank Central Asia
Rakyat’s high structural cost of risk continues to weigh on its pre- and post-provision returns, with the latter being eroded further to 3Q24


Indonesian Banks Screener; Stick with Bank Negara (BBNI IJ) And Bank Mandiri (BMRI IJ)

External broker reports(aggregated public sources), MNC Sekuritas

MNC Sekuritas

External broker reports(aggregated public sources)

MNC Sekuritas, the first wholly-owned subsidiary established by the Group back in 1989, provides a complete range of services, from equity, fixed income, investment banking to providing research to optimize clients’ investments. Thus far, the company has more than 140 points of sales with over 100,000 clients. Content available is external broker reports authored by a third party outside the Smartkarma network and has been aggregated by an online aggregator through publicly available sources and is displayed by Smartkarma in this format for user's convenience and general informational purposes only. Content does not constitute investment or financial advice and Smartkarma makes no representation or warranty regarding its accuracy or contents. Original third party author retains all copyright and other proprietary rights in the content. Access or use of third party links not controlled by Smartkarma are at the user's own risk.

<ul><li>BBNI booked IDR5.6tn of net profit in 3Q24 (+4.7% QoQ), bringing 9M24 NPAT to IDR16.3tn (+3.5% YoY), came at 76%/74% of ours/cons estimates-mostly inline.</li><li>Net interest income fell by -5.5% YoY to IDR29tn in 9M24. Non-interest income increased by +15.1% YoY to IDR16.8tn in 9M24.</li><li>Opex increased by +7% YoY to IDR21tn and CIR was up by +260bps to 43.8%.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BBNI booked IDR5.6tn of net profit in 3Q24 (+4.7% QoQ), bringing 9M24 NPAT to IDR16.3tn (+3.5% YoY), came at 76%/74% of ours/cons estimates-mostly inline.Net interest income fell by -5.5% YoY to IDR29tn in 9M24. Non-interest income increased by +15.1% YoY to IDR16.8tn in 9M24.Opex increased by +7% YoY to IDR21tn and CIR was up by +260bps to 43.8%.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BBNI IJ - NIM & CoC Boost Profits, Asset Quality Remains Steady

External broker reports(aggregated public sources), BRI Danareksa Research

BRI Danareksa Research

As a one-stop financial solution with the vision to be the most valuable securities house, BRI Danareksa Sekuritas (BRIDS) has maintained an excellent track record and extensive experience in the capital market as an underwriter, broker, and financial advisor for individual, institutional, foreign and domestic, private and government clients. Established in 1992, PT Danareksa Sekuritas is a securities company that performs activities as a securities broker, underwriter, or arranger and financial advisor.

<ul><li>BBNI booked 3Q24 NP of Rp5.6tr in 3Q24 (+5% qoq, +3% yoy) supported by NIM improvement from both higher EA yield and lower CoF.</li><li>Additional GWM incentives allowed the bank to reduce its high-cost deposits and USD loan repricing drove the loan yield higher.</li><li>We maintain our FY24-25 est. and Buy rating with an unchanged TP of Rp7,600 based on 5-yr inverse CoE GGM model (fair value PBV of 1.6x).</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BBNI booked 3Q24 NP of Rp5.6tr in 3Q24 (+5% qoq, +3% yoy) supported by NIM improvement from both higher EA yield and lower CoF.Additional GWM incentives allowed the bank to reduce its high-cost deposits and USD loan repricing drove the loan yield higher.We maintain our FY24-25 est. and Buy rating with an unchanged TP of Rp7,600 based on 5-yr inverse CoE GGM model (fair value PBV of 1.6x).Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Bank Negara Indonesia - Robust 3Q24 and in Line 9M24 Net Profit...

<ul>
<li>Negara value attributes, its growth potential captured by its low PEG ratio and its improving efficiency ratio all stand out; pre- and post-provision returns edged higher, with high NPL coverage</li>
<li>We are also positive on Mandiri for its quality attributes, its premium returns, and its strong credit quality metrics; Mandiri has the second-best efficiency ratio after mega-cap Bank Central Asia</li>
<li>Bank Mega has seen credit quality stabilise in 2Q24, but its returns are under pressure, with the efficiency ratio worsening steadily; cost of risk is likely to increase going forward</li>
</ul>


Negara value attributes, its growth potential captured by its low PEG ratio and its improving efficiency ratio all stand out; pre- and post-provision returns edged higher, with high NPL coverage
We are also positive on Mandiri for its quality attributes, its premium returns, and its strong credit quality metrics; Mandiri has the second-best efficiency ratio after mega-cap Bank Central Asia
Bank Mega has seen credit quality stabilise in 2Q24, but its returns are under pressure, with the efficiency ratio worsening steadily; cost of risk is likely to increase going forward


Indonesian Banks Screener; Bank Negara (BBNI IJ), the Value and Growth Pick

<ul><li>Net profit grew by +3.2% YoY in 7M24, driven by lower credit costs and strong non-interest income.</li><li>NIM reached 4.6% in Jul-24, but NIM guidance for FY24E was revised down to ≥4% YoY from ≥4.5%.</li><li>Loan growth reached 11.1% YoY in 7M24, surpassing expectations.</li></ul>Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

Net profit grew by +3.2% YoY in 7M24, driven by lower credit costs and strong non-interest income.NIM reached 4.6% in Jul-24, but NIM guidance for FY24E was revised down to ≥4% YoY from ≥4.5%.Loan growth reached 11.1% YoY in 7M24, surpassing expectations.Content is external broker report sourced from online content aggregator through publicly available sources and is displayed below for general informational purposes only. Refer full disclaimer below.

BBNI IJ - MNC Sekuritas Equity Report September 05, 2024

Indonesia

PT Bank Negara Indonesia (Persero) Tbk is a state-owned bank that conducts commercial and consumer banking services.

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Bank Negara Indonesia Persero (BBNI IJ)

Indonesian Banks Screener; Stick with Bank Negara (BBNI IJ) And Bank Mandiri (BMRI IJ)

We like Negara and Mandiri; Negara stands out on valuation and is starting to deliver stronger returns, whilst Mandiri is attractive on PE...

Victor Galliano

BBNI IJ - NIM & CoC Boost Profits, Asset Quality Remains Steady

BBNI booked IDR5.6tn of net profit in 3Q24 (+4.7% QoQ), bringing 9M24 NPAT to IDR16.3tn (+3.5% YoY), came at 76%/74% of ours/cons estimates-mostly...

MNC Sekuritas

Bank Negara Indonesia - Robust 3Q24 and in Line 9M24 Net Profit...

BBNI booked 3Q24 NP of Rp5.6tr in 3Q24 (+5% qoq, +3% yoy) supported by NIM improvement from both higher EA yield and lower CoF.

BRI Danareksa Research

Indonesian Banks Screener; Bank Negara (BBNI IJ), the Value and Growth Pick

Negara is our top pick, Mandiri remains a buy; both banks have big valuation differentials with quality play BCA and they have lower structural...

Victor Galliano

BBNI IJ - MNC Sekuritas Equity Report September 05, 2024

Net profit grew by +3.2% YoY in 7M24, driven by lower credit costs and strong non-interest income. NIM reached 4.6% in Jul-24, but NIM guidance for...

MNC Sekuritas

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Indonesian Banks Screener; Stick with Bank Negara (BBNI IJ) And Bank Mandiri (BMRI IJ)

​We like Negara and Mandiri; Negara stands out on valuation and is starting to deliver stronger returns, whilst Mandiri is attractive on PE...

Victor Galliano

BBNI IJ - NIM & CoC Boost Profits, Asset Quality Remains Steady

BBNI booked IDR5.6tn of net profit in 3Q24 (+4.7% QoQ), bringing 9M24 NPAT to IDR16.3tn (+3.5% YoY), came at 76%/74% of ours/cons estimates-mostly...

MNC Sekuritas

Bank Negara Indonesia - Robust 3Q24 and in Line 9M24 Net Profit...

BBNI booked 3Q24 NP of Rp5.6tr in 3Q24 (+5% qoq, +3% yoy) supported by NIM improvement from both higher EA yield and lower CoF.

BRI Danareksa Research

Indonesian Banks Screener; Bank Negara (BBNI IJ), the Value and Growth Pick

Negara is our top pick, Mandiri remains a buy; both banks have big valuation differentials with quality play BCA and they have lower structural...

Victor Galliano

BBNI IJ - MNC Sekuritas Equity Report September 05, 2024

Net profit grew by +3.2% YoY in 7M24, driven by lower credit costs and strong non-interest income. NIM reached 4.6% in Jul-24, but NIM guidance for...

MNC Sekuritas

We like Negara and Mandiri; Negara stands out on valuation and is starting to deliver stronger returns, whilst Mandiri is attractive on PE...