Bank BJB (BJBR) – Downgrade to Hold
Price: Rp1,260 – Target Price: Rp1,300
Disappointing 4Q12 results
- Net interest income fell 14% QoQ in 4Q12, while net income fell 28% QoQ.
- However net interest income in FY12 reached Rp3.6 trillion (+19.4% YoY) and net profit Rp1.19 trillion (+24% YoY).
- FY12 performance was below our estimates and the market, net income represents only 88% of our estimate and 95% of the market.
- Weak performance in 4Q12 was a combination of lower interest income (-1%) and higher interest expense (+16%).
- Lower interest income due to: 1) decrease in asset yields by 48 bps and 2) 40 bps increase in NPLs. Higher NPL made provision expenses rose 12% to Rp135 billion QoQ in 4Q12.
- Higher interest expense in 4Q12 mainly due to deposits growth by 3.7% over the past 2 months since 9M12.
- We downgrade our target price to Rp1,300 (down 10% from previous target price) reflecting the 1.9x PBV’13 and we also lowered our recommendation to Hold. Downgrade to Hold
- BJBR_130313_jp (84.8 KiB)