Bank Negara Indonesia (BBNI) – Maintain BUY
Price: Rp3,600 - Target Price: Rp4,500
In Line FY10 result
- As of FY10, BBNI posted net interest income and net income of Rp11.7 trillion and Rp4.1 trillion, respectively, in line with our projection and slightly above market consensus.
- Cost of funds declined to 3.6% from 4.7% due to the increased portion of low cost fund to 59% (from 55 % previously) and low deposit rate.
- Cost to income was booked only 51%, it was supported by reversal on allowances of Rp1.8 trillion aside from the low cost of funds.
- On 4Q10, loan increased by Rp11 tr or +11% QoQ and was recorded as the highest growth on quarterly basis and we believe it was caused by the Rp10 trillion impact of right issue on 4Q10.
- With improving ROE and NPL, we believe BBNI is feasible to trade at PBV’11 2.6x that reflects target price of Rp4,500. Maintain BUY