ASEAN Insight Provider, CrossASEAN Research

Angus Mackintosh

ASEAN Insight Provider

CrossASEAN Research

At CrossASEAN Research we strive to produce unbiased and differentiated on the ground insights on companies across South East Asia. Our Research is produced for the most part after face to face meetings and conversations with company management to dig deep into the long term vision and strategy of the companies we cover. We seek to deliver investable and actionable themes on sectors and markets across SE Asia, often in collaboration with other Insight Providers across the region, pooling the vast experience of the analysts within the Smartkarma Ecosystem. We also offer bespoke work and tailor made trips for our clients. 

Insights across South East Asia

Equity Bottom-Up

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<a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia (BBRI IJ)</a> have seen a significant correction on the back of concerns over credit quality, as provisions increased in 1Q2024, the bank addressed its problem micro-loans</li>
<li>The bank is addressing these loans with some further provisions likely over the coming quarter but special mention loans should plateau in July signifying a turn. </li>
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<a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia</a> will slow micro-lending and grow corporate loans this year to address the cost of credit. Profits will likely be flat and dividend payout up. Valuations are attractive.</li>
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Bank Rakyat Indonesia (BBRI IJ) have seen a significant correction on the back of concerns over credit quality, as provisions increased in 1Q2024, the bank addressed its problem micro-loans
The bank is addressing these loans with some further provisions likely over the coming quarter but special mention loans should plateau in July signifying a turn. 

Bank Rakyat Indonesia will slow micro-lending and grow corporate loans this year to address the cost of credit. Profits will likely be flat and dividend payout up. Valuations are attractive.


Bank Rakyat Indonesia (BBRI IJ) - Special Mention on the Turn

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

BRI Danareksa Research

External broker reports(aggregated public sources)

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>BBRI reported 4M24 NP of Rp17.8tr (+4% yoy) with PPOP growth of 15% supported by higher other op. income and 12% loans growth.</li><li>Off 1Q24’s high base CoC of 3.7% (Feb24’s CoC was 6.7%), BBRI’s CoC improved to 3.3%. This should ease asset quality concerns.</li><li>The bank’s share price has declined by 28% since Mar24, bringing its PBV to slightly below mean and implied CoE to 11.1% (close to -2SD).</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.

BBRI reported 4M24 NP of Rp17.8tr (+4% yoy) with PPOP growth of 15% supported by higher other op. income and 12% loans growth.Off 1Q24’s high base CoC of 3.7% (Feb24’s CoC was 6.7%), BBRI’s CoC improved to 3.3%. This should ease asset quality concerns.The bank’s share price has declined by 28% since Mar24, bringing its PBV to slightly below mean and implied CoE to 11.1% (close to -2SD).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 Rakyat Indonesia (BBRI IJ) 4M24 Earnings Aided by Other Operating Income

<ul><li>Despite the 91% increase in provisions, BBRI booked 1Q24 net profit of Rp15.9tr in 1Q24 (+2% yoy) with strong PPOP growth of +22% yoy.</li><li>The mgmt raised CoC/NPL guidance to max 3.0% (from 2.2-2.3%) and to max 3.0% (from 2.7-2.9%), but with an expected improvement in 2H24.</li><li>Since Mar24, BBRI’s valuation has de-rated to 2.4x PBV (+0.5SD vs 5- year mean) as the shares fell 15%, underperforming the sector by 11%.</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.

Despite the 91% increase in provisions, BBRI booked 1Q24 net profit of Rp15.9tr in 1Q24 (+2% yoy) with strong PPOP growth of +22% yoy.The mgmt raised CoC/NPL guidance to max 3.0% (from 2.2-2.3%) and to max 3.0% (from 2.7-2.9%), but with an expected improvement in 2H24.Since Mar24, BBRI’s valuation has de-rated to 2.4x PBV (+0.5SD vs 5- year mean) as the shares fell 15%, underperforming the sector by 11%.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 Rakyat Indonesia (BBRI IJ) Positive 1Q24 Net Profit Growth Despite Higher Provisions

<ul><li>BBRI reported FY23 net profit of Rp60.1tr (+17% yoy, 102% of the cons.) on higher NII and lower opex, partly offset by higher provisions.</li><li>The bank provides guidance for stable loans growth, NIM, CIR, and DPO, and expects lower NPLs and CoC in FY24F.</li><li>BBRI trades at 2.5x FY24F PBV, +1SD to its 5-year avg., reflecting its robust performance and growth outlook.</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.

BBRI reported FY23 net profit of Rp60.1tr (+17% yoy, 102% of the cons.) on higher NII and lower opex, partly offset by higher provisions.The bank provides guidance for stable loans growth, NIM, CIR, and DPO, and expects lower NPLs and CoC in FY24F.BBRI trades at 2.5x FY24F PBV, +1SD to its 5-year avg., reflecting its robust performance and growth outlook.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 Rakyat Indonesia (BBRI IJ) - Robust 4Q23 Profit

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<a href="https://www.smartkarma.com/entities/bank-rakyat-indonesia-persero" target="_blank" data-smartkarma-citation="entities:484:1" rel="noopener">Bank Rakyat Indonesia's</a> results reflected its ability to offset a tighter liquidity environment with a higher margin loan mix as it continues to shift to commercial Kupedes microloans. </li>
<li>The bank has also seen the benefit of increasing digitalisation benefitting costs with more BRILink agents and users of mobile banking through BRIMO, which has also helped to grow CASA.</li>
<li>Guidance for 2024 remains positive on loan growth, NIMs,  increasing leverage, and rising loan yields, with stable credit quality. Valuations look attractive relative to a forecast ROE of above 20%. </li>
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Bank Rakyat Indonesia's results reflected its ability to offset a tighter liquidity environment with a higher margin loan mix as it continues to shift to commercial Kupedes microloans. 
The bank has also seen the benefit of increasing digitalisation benefitting costs with more BRILink agents and users of mobile banking through BRIMO, which has also helped to grow CASA.
Guidance for 2024 remains positive on loan growth, NIMs,  increasing leverage, and rising loan yields, with stable credit quality. Valuations look attractive relative to a forecast ROE of above 20%. 


Bank Rakyat Indonesia (BBRI IJ) - Pushing the Margins of Profitability

Indonesia

PT Bank Rakyat Indonesia (Persero) Tbk provides commercial banking activities and its related services. The Bank also provides banking activities based on shariah principles.

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Bank Rakyat Indonesia (BBRI IJ)