Sector Spotlight

19 November 2020

Overweight Indonesia Banks JCI: 5,594

(Unchanged) Prasetya Christy Gunadi Ramadhany Andryanto

E-mail: prasetya.christy@bahana.co.id E-mail: ramadhany@bahana.co.id
Phone: +6221 250 5081 Ext. 3605 Phone: +6221 250 5081 Ext. 3614

Earnings upgrades for 2020F on the back of higher NIM and lower COC Exhibit 1. Sector relative valuations
Bloomberg Up/Downside Mkt. cap 2021E PBV
RATING CP (IDR) TP (IDR)
Banks have made sufficient provision buffers YTD Ticker (%) (USDmn) (x)

Post 3Q20 results we upgrade our earnings forecasts for banks under coverage by BBCA IJ BUY 33,075 37,500 13.4 57,262 3.8
BBRI IJ BUY 4,040 4,700 16.3 34,992 2.2
an average of +17.8%, on the back of a lower CoC outlook (-17bps) and higher NIM
BBNI IJ BUY 5,750 7,600 32.2 7,530 0.8
outlook (+23bps) in 2020F, as the pace of loan restructuring has slowed down in BMRI IJ BUY 6,325 8,500 34.4 20,727 1.3
3Q20; hence most of the banks have given lower targets of total loans restructured BBTN IJ BUY 1,705 2,200 29.0 1,268 0.8
BDMN IJ HOLD 2,760 2,800 1.4 1,894 0.6
in 2020, which along with the extension of the loan restructuring program under
BJBR IJ BUY 1,305 1,500 14.9 902 0.9
POJK No.11/2020 until 1Q22 should help ensure the banks that the risk of asset BNGA IJ BUY 840 1,100 31.0 1,482 0.4
quality downgrades next year has been mitigated. We believed the provision buffers PNBN IJ BUY 925 1,150 24.3 1,565 0.5
built so far have been adequate; hence we are lowering the CoC target for the banks Source: Bloomberg, Bahana forecasts
Note: Pricing as of 19 November 2020
this year, except for BBNI, as the new management’s focus for this year will be on
monitoring and analysing its existing loan book quality, and to make provisions Exhibit 2. Sector relative share-price
performance
accordingly. NIM upgrades were mainly due to lowering CoF further, as the deposits
growth reached ~+16% YoY for banks under our coverage in 9M20, which allows
the banks to have ample liquidity, and BI just lowered its 7-day RR further (-25bps)
to reach 3.75%; hence the trend of lower TD rates will continue in 4Q20.

Positive earnings growth QoQ for banks in 3Q20

Banks under our coverage have reported average 3Q20 net earnings growth of
-40.3% YoY and +50.5 QoQ, bringing 9M20 growth to -30.9% YoY. NIM for the
banks expanded QoQ as a result of lower CoF and higher yields. We note that banks
under our coverage booked total NII of IDR8.3tn (-3.6% YoY and +7.7% QoQ) in
3Q20, mainly caused by soft loan growth of 1.8% YoY. Total deposits for the banks Source: Bloomberg
increased by 16.2% YoY in 3Q20, which resulted in lower LDR of 83.4% vs. 88.4%
in 2Q20 and 95.2% in 3Q19. In terms of asset quality, NPLs slightly improved QoQ
to 3.1% (+8bps QoQ) but still worsened compared to last year’s 2.8%, which we
believe is still manageable in the current situation.

Still attractive valuations

Even though the share prices of banks under our coverage have appreciated
recently, we believe the potential upside still remains high after earnings upgrades
for 2020F, and earnings growth of 43.5% YoY remains intact in 2021F (refer to our
new earnings forecasts in exhibit 19). We maintain our OVERWEIGHT stance on the
sector on the back of still attractive valuations, and believe that continued support
from the government, Financial Services Authority (OJK), and Central Bank (BI) to
counter the economic impact of the Covid-19, will have a positive impact for the
banking industry going forward. The government policy focuses on stimulus to boost
loan growth, while OJK’s policy focuses on asset quality, and BI focuses on liquidity
in the banking system. Despite negative earnings growth for the banks this year
from additional credit costs for COVID-19 related risk and NIM pressure, we believe
banks have improved their risk management and are more careful in giving out
loans. Hence, the impact on NPLs might not be that stark and we also believe once
the pandemic is over, the recovery for the banking industry will be seen
immediately. At this stage, BMRI and BBNI remain our top picks, as they have
high exposure to the corporate segment, especially SOEs, which should be more
resilient in times of economic downturn. We believe BMRI’s asset quality
improvement trend will continue going forward, as management has been improving
its credit-risk governance, and the new management also maintained the bank’s
long-term plans. Please refer to Exhibit 15 for our new ratings and target prices.
Downside risks to our call: 1) higher-than-expected provisioning, 2) further loan
growth pressure, and 3) worse-than-expected margin pressure from a higher
number of loans restructured.

Disclosure: PT. Bahana Sekuritas does and seeks to do business with companies covered in its research reports. Investors should consider this report as only a single
factor in making their investment decision.

Please see the important disclaimer information on the back of this report
Exhibit 3: Net interest income for banks under our coverage

IDRtn
25.0
20.8
20.0
20.0
15.1
15.0 12.8 13.6 13.2

9.3 8.9
10.0

5.0 3.6 3.6 3.2 3.1

2.2 2.3 1.7 2.3 2.1
1.5

0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN
3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

Exhibit 4: Provisioning expense for banks under our coverage

IDRtn
10.0 9.1

8.0
6.5

6.0 5.4 5.3

4.0 3.6

2.2 2.1
1.5 1.7
2.0 1.1 0.9 0.9 0.9 0.8
0.6 0.5
0.3
0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

Exhibit 5: Net Profit for banks under our coverage

IDRtn
10.0
8.6
8.1 7.8
8.0
6.7

6.0
4.3
3.9 3.7
4.0

2.0 (0.1) (0.5) 1.0

0.8 0.6 0.7 0.8
0.4 0.1 0.3 0.4
0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN
(2.0)

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 2

Exhibit 6: Loan growth for banks under our coverage
%
20.0 16.7
14.7
15.0 11.7
10.7
9.3 8.7
10.0 7.8
6.9
4.2 4.9
3.9 3.7 3.9
5.0
1.0
0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN
(5.0) (0.8)
(5.1) (5.6)
(10.0)

(15.0) (12.6)

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

Exhibit 7: Total deposit growth for banks under our coverage

%
20.0 18.0 18.1 18.7
17.3
14.4 15.1
13.9
15.0
11.3
10.4 9.9 10.0
10.0 7.2 7.0
5.9 6.3

5.0
1.2

0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN
(5.0) (2.1)

(10.0)

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

Exhibit 8: NIM for banks under our coverage

%
10.0
9.0 8.2
7.7
8.0
6.9
7.0 6.2
5.6 5.7 5.5 5.6
6.0 5.0
5.4 5.3
4.9 4.8
5.0 4.3 4.2
4.0
4.0 3.2 3.1
3.0
2.0
1.0
0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN
3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 3

Exhibit 9: COC for banks under our coverage
%
6.0
4.5
3.9
4.0
3.1 3.2
2.7 2.6 2.5
2.4 2.4
2.0
1.7
2.0 1.5 1.4 1.3 1.3
1.1 0.9

0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN

(2.0) (1.4)

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

Exhibit 10: CASA for banks under our coverage

%
90.0
75.6 76.4
75.0
63.7 65.4 64.3 65.4
58.6 59.0 60.3
60.0
50.1 48.9 50.0
45.7 43.8
42.6
45.0 37.0 37.8
35.6

30.0

15.0

0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

Exhibit 11: LDR for banks under our coverage

%
140.0 127.9

120.0 114.2 111.5

100.7 104.3
94.1 94.1 96.2 93.3
100.0 88.4
84.3 82.8 84.9 82.6 85.3 81.9 85.2
74.4
80.0

60.0

40.0

20.0

0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 4

Exhibit 12: NPL for banks under our coverage

%
5.0 4.6

3.9
4.0 3.6 3.5
3.5
3.3 3.2
3.1 3.1
3.0 3.0
3.0 2.6 2.6

1.9 1.9
2.0 1.8
1.6 1.5

1.0

0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

Exhibit 13: ROE for banks under our coverage

%
20.0
17.9 17.8

15.4
16.0 14.6 14.5 14.6
13.5

12.0
9.7 9.8
8.3 8.4
7.2 7.6
8.0 7.0

4.6 4.5
3.8
4.0
1.2

0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

Exhibit 14: NPL coverage for banks under our coverage

%
248.6
250.0

199.1 201.7 196.5

194.7
200.0
162.3
147.6 147.9 153.1
141.9 144.2
150.0 131.5

100.1 101.7 100.7

90.9
100.0
63.0
48.3
50.0

0.0
BBCA BBRI BMRI BBNI BDMN BBTN BNGA BJBR PNBN

3Q19 4Q19 1Q20 2Q20 3Q20

Source: Companies, Bahana

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 5

Exhibit 15. Summary of recommended stocks

Target price (IDR) Current Price Upside/downside Recommendation 2021 P/BV (x)
Code
Old New IDR potential (%) Old New Old New

BBCA 37,500 37,500 33,075 13.4 BUY BUY 4.3 4.3

BBRI 4,500 4,700 4,040 16.3 BUY BUY 2.5 2.6
BMRI 7,900 8,500 6,325 34.4 BUY BUY 1.7 1.8
BBNI 7,400 7,600 5,750 32.2 BUY BUY 1.0 1.1
BBTN 1,700 2,200 1,705 29.0 BUY BUY 0.8 1.0
BDMN 3,000 2,800 2,760 1.4 HOLD HOLD 0.6 0.6
BNGA 850 1,100 840 31.0 HOLD BUY 0.5 0.6
PNBN 1,000 1,150 925 24.3 BUY BUY 0.5 0.6
BJBR 1,250 1,500 1,305 14.9 BUY BUY 0.9 1.1

Source: Bloomberg, Bahana forecasts. Prices as of 19 November 2020

Exhibit 16. Earnings revisions for 2020F

Net Profit 2020F Changes in Loan growth Changes in Changes in

NIM 2020F (%)
Code (IDRtn) NP 2020F (IDRtn) loan growth NIM
Old New (%) Old New (ppts) Old New (ppts)
BBCA 22.8 25.6 11.9 3.5 2.0 (1.6) 5.5 5.8 0.3
BBRI 16.1 20.2 25.0 4.9 4.9 0.0 5.5 5.7 0.2
BMRI 13.8 18.0 31.1 3.0 3.8 0.8 4.5 4.8 0.3
BBNI 5.6 3.8 (31.5) 3.8 3.8 0.0 4.2 4.3 0.1
BBTN 0.8 1.5 79.2 3.1 0.5 (2.6) 3.0 3.2 0.1
BDMN 1.4 1.8 22.7 1.2 -2.9 (4.1) 7.9 8.0 0.1
BNGA 2.0 2.3 10.2 0.8 -4.2 (4.9) 4.8 4.9 0.1
PNBN 2.0 2.9 49.5 2.2 -6.4 (8.6) 4.2 4.6 0.4
BJBR 1.1 1.4 29.7 2.0 6.4 4.5 5.3 5.6 0.2

Source: Bahana forecasts.

When a report covers six or more subject companies please access important disclosures for Daiwa Capital Markets Hong Kong Limited at http://www.hk.daiwacm.com/research_disclaimer.html
or contact your investment representative or Daiwa Capital Markets Hong Kong Limited at Level 26, One Pacific Place, 88 Queensway, Hong Kong.

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 6

Exhibit 17. 9M20 results summary
9M20 (IDRtn) BBCA BBRI BMRI BBNI Big 4 BDMN BBTN BNGA BJBR PNBN Ex. big 4 Total

Net interest income 40.8 57.1 42.2 26.6 166.7 11.0 6.7 9.3 4.7 6.5 38.2 204.9

Chg (% y-y) 9.0 (6.2) (4.1) (0.8) (1.4) 2.8 (3.0) (2.3) 6.5 (1.8) 0.1 (1.1)

Opex 34.0 58.1 44.1 17.4 153.5 12.0 6.9 15.7 4.2 4.0 42.7 196.2

Chg (% y-y) 10.8 18.3 14.2 1.0 13.2 14.8 (7.7) (11.9) (0.9) 9.9 (1.9) 9.6

PPOP 20.2 39.0 34.4 20.0 113.6 6.5 1.4 6.3 1.7 4.7 20.7 134.3

Chg (% y-y) (39.2) (15.6) (4.7) (2.7) (16.5) 9.8 (55.6) 1.6 (23.3) 10.9 (5.3) (15.0)

Provisions 9.1 18.6 15.5 14.0 57.1 4.1 1.6 3.6 0.2 1.8 11.3 68.4

Net profit 20.0 14.1 14.0 4.3 52.5 1.5 1.1 1.9 1.2 2.3 8.0 60.5

Chg (% y-y) (4.2) (43.0) (30.7) (63.9) (32.6) (43.1) 39.7 (30.4) 5.7 (3.1) (16.9) (30.9)

Growth (% y-y)

Loan (y-y) 1.0 3.9 3.7 4.2 3.3 (5.1) (0.8) (5.6) 8.7 (12.6) (3.7) 1.8

Deposit (y-y) 14.4 18.0 15.1 21.4 17.0 6.3 18.7 11.3 17.3 7.0 12.8 16.2

Net Fee income (y-y) (4.0) 16.1 (0.4) (4.6) 2.3 27.3 (19.4) (41.3) 1,295.0 (25.9) (5.4) 1.4

Non int. income (y-y) (31.9) 11.1 (1.3) (1.5) (6.4) 17.8 1.7 (35.4) (25.3) 74.4 (4.8) (6.2)

Ratios (%)

Net interest margin 5.6 5.7 4.0 4.3 4.9 7.7 3.1 4.9 5.3 4.2 5.0 5.0

Chg (bp y-y) (64.0) (119.0) (151.0) (74.2) (102.0) (47.0) (10.0) (44.0) (31.0) (58.5) (38.1) (70.1)

Credit cost (bp) 143.0 388.6 241.5 449.3 305.6 269.5 88.0 318.0 n.a. 253.3 157.8 231.7

Chg (bp y-y) (8.3) 148.1 71.4 343.7 138.7 (37.9) (175.5) 122.0 n.a. 124.0 (46.7) 46.0

Cost to income 66.8 87.5 81.6 99.2 83.8 81.9 93.2 89.8 79.2 65.7 82.0 82.9

Chg (y-y) 11.2 16.7 10.3 41.6 20.0 (3.9) (16.5) 3.1 (7.6) 4.9 (4.0) 8.0

Loan to deposit* 74.4 82.8 84.9 82.6 81.6 114.2 93.3 85.3 81.9 85.2 91.3 83.4

Chg (y-y) (9.9) (11.3) (9.3) (13.6) (10.8) (13.7) (18.3) (15.4) (6.5) (19.1) (15.7) (11.8)

CASA ratio 76.4 59.0 65.4 65.4 65.8 50.1 37.0 60.3 43.8 37.8 45.5 61.9

Chg (y-y) 0.8 0.5 1.7 1.1 0.9 4.4 (5.6) 11.4 (6.2) 2.2 1.2 1.0

NPL coverage 248.6 199.1 194.7 201.7 211.0 100.1 101.7 196.5 141.9 144.2 135.6 173.3

Chg (y-y) 86.4 51.5 46.8 48.5 58.3 37.1 53.3 65.1 41.2 53.3 52.2 55.2

NPL ratio 1.9 3.1 3.5 3.6 3.0 3.2 4.6 3.9 1.5 3.0 3.2 3.1

Chg (y-y) 0.3 0.0 0.9 1.7 0.7 (0.0) 1.0 1.3 (0.3) (0.0) 0.4 0.6

ROE 15.4 9.7 9.8 3.8 9.7 4.6 7.2 1.2 14.6 7.6 7.0 8.3

Chg (y-y) (2.5) (8.2) (4.8) (10.7) (6.5) (3.7) 2.6 (5.8) 1.1 (0.8) (1.3) (3.9)

CAR 25.7 21.0 19.5 16.7 20.8 22.2 19.0 20.9 15.6 27.3 21.0 20.9
Source: Companies

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 7

Exhibit 18. 3Q20 results summary
3Q20 (IDR tn) BBCA BBRI BMRI BBNI Big 4 BDMN BBTN BNGA BJBR PNBN Ex. big 4 Total
Net interest income 13.6 20.0 13.2 8.9 55.6 3.6 2.3 3.1 1.7 2.1 12.6 68.3
Chg (% QoQ) (0.1) 28.6 (1.3) 7.2 9.5 (1.3) 1.2 (2.5) 6.1 1.0 0.2 7.7
Chg (% y-y) 5.9 (4.0) (12.4) (4.4) (4.1) (2.1) 3.0 (3.2) 12.3 (10.6) (1.3) (3.6)
Opex 7.7 21.4 14.6 6.1 49.9 3.2 2.4 3.8 0.6 1.6 11.5 61.4
Chg (% QoQ) 126.6 27.2 (7.8) 8.6 19.6 (27.6) 3.2 (31.1) (70.3) 39.2 (24.4) 7.8
Chg (% y-y) (16.1) 29.1 6.0 3.4 9.6 (12.7) (29.7) (40.0) (61.5) 29.8 (28.2) (0.3)
PPOP (1.9) 14.0 10.3 6.6 29.0 2.0 (0.6) 1.4 0.2 2.1 5.0 34.1
Chg (% QoQ) (115.8) 70.3 (3.2) 15.1 (20.4) 19.9 (150.7) (50.0) (68.8) 63.6 (32.4) (22.4)
Chg (% y-y) (115.1) (15.7) (16.7) (4.3) (39.8) (3.3) (156.4) (27.3) (71.0) 32.8 (30.1) (38.5)
Provisions 2.1 9.1 5.3 6.5 22.9 0.9 0.6 0.9 (0.3) 0.8 2.9 25.8
Net profit 7.8 3.9 3.7 (0.1) 15.3 0.6 0.4 0.1 0.4 1.0 2.5 17.8
Chg (% QoQ) 37.8 95.4 57.1 (167.2) 49.5 (257.8) 13.5 (82.7) 1.6 64.7 56.6 50.5
Chg (% y-y) (3.3) (54.5) (44.4) (103.2) (44.8) (19.4) (169.8) (83.0) 18.3 28.0 19.3 (40.3)

Growth (%)
Loan (QoQ) (0.8) 1.3 0.2 1.0 0.5 (4.5) 1.2 (2.8) 3.6 (4.0) (1.3) 0.1
Loan (y-y) 1.0 3.9 3.7 4.2 3.3 (5.1) (0.8) (5.6) 8.7 (12.6) (3.7) 1.8
Loan (ytd) (1.8) 3.4 (3.8) 4.6 0.4 (5.5) (0.4) (6.9) 8.4 (11.3) (3.8) (0.5)
Deposit (QoQ) 2.6 5.6 5.0 6.4 4.9 5.8 20.8 4.0 20.2 3.6 11.1 6.1
Deposit (y-y) 14.4 18.0 15.1 21.4 17.0 6.3 18.7 11.3 17.3 7.0 12.8 16.2
Deposit (ytd) 10.9 10.9 9.9 14.8 11.3 7.8 21.3 8.3 29.2 11.4 15.2 12.1
Net fee inc. (QoQ) (4.6) 17.0 1.8 4.3 4.8 31.5 2.0 (82.4) n.a. (4.2) 17.7 6.0
Net Fee income (y-y) (14.7) 11.6 (11.5) (5.8) (5.1) (5.9) (8.5) (88.6) 3,760.1 (13.7) (15.6) (6.3)
Non int. income (QoQ) (79.6) (4.9) 8.6 24.3 26.9 63.3 (1.5) (129.0) n.a. 333.2 (45.6) 11.3
Non int. income (y-y) (109.5) (8.7) (14.2) 8.6 (35.0) (28.8) 15.7 (121.7) (238.3) 230.5 (54.5) (37.8)
NPL (QoQ) (8.0) 1.0 2.6 16.6 3.9 (26.1) (2.0) (2.8) (2.9) (7.4) (8.7) (2.4)
NPL (y-y) 20.3 5.2 39.1 97.9 36.2 (5.4) 27.8 40.1 (6.9) (13.5) 9.9 24.2

Ratios (%)
Net interest margin 5.6 5.7 4.0 4.3 4.9 7.7 3.1 4.9 5.3 4.2 5.0 5.0
Chg (bp QoQ) (22.0) 99.0 (28.0) 11.4 15.1 (10.0) (12.0) (12.0) (50.0) (7.1) (18.2) (1.6)
Chg (bp y-y) (64.0) (119.0) (151.0) (74.2) (102.0) (47.0) (10.0) (44.0) (31.0) (58.5) (38.1) (70.1)
Credit cost (bp) 143.0 388.6 241.5 449.3 305.6 269.5 88.0 318.0 n.a. 253.3 157.8 231.7
Chg (bp QoQ) (183.3) 267.4 (87.8) 89.8 21.5 (298.1) (7.0) 17.0 n.a. 98.5 (85.9) (32.2)
Chg (bp y-y) (8.3) 148.1 71.4 343.7 138.7 (37.9) (175.5) 122.0 n.a. 124.0 (46.7) 46.0
Cost to income 66.8 87.5 81.6 99.2 83.8 81.9 93.2 89.8 79.2 65.7 82.0 82.9
Chg (QoQ) 20.2 4.3 (5.6) 4.0 5.7 (25.1) 1.0 2.2 (9.1) (3.7) (6.9) (0.6)
Chg (y-y) 11.2 16.7 10.3 41.6 20.0 (3.9) (16.5) 3.1 (7.6) 4.9 (4.0) 8.0
Loan to deposit* 74.4 82.8 84.9 82.6 81.6 114.2 93.3 85.3 81.9 85.2 91.3 83.4
Chg (QoQ) (2.6) (3.5) (4.0) (4.5) (3.6) (12.3) (18.0) (6.0) (13.1) (6.7) (11.4) (4.9)
Chg (y-y) (9.9) (11.3) (9.3) (13.6) (10.8) (13.7) (18.3) (15.4) (6.5) (19.1) (15.7) (11.8)
CASA ratio 76.4 59.0 65.4 65.4 65.8 50.1 37.0 60.3 43.8 37.8 45.5 61.9
Chg (QoQ) 0.4 2.6 3.5 (0.0) 1.8 (2.5) (7.7) 6.6 (6.3) 1.5 (1.9) 0.9
Chg (y-y) 0.8 0.5 1.7 1.1 0.9 4.4 (5.6) 11.4 (6.2) 2.2 1.2 1.0
NPL coverage 248.6 199.1 194.7 201.7 211.0 100.1 101.7 196.5 141.9 144.2 135.6 173.3
Chg (QoQ) 45.2 15.7 7.1 (4.5) 15.9 17.1 3.1 13.1 7.9 0.5 8.5 12.2
Chg (y-y) 86.4 51.5 46.8 48.5 58.3 37.1 53.3 65.1 41.2 53.3 52.2 55.2
NPL ratio 1.9 3.1 3.5 3.6 3.0 3.2 4.6 3.9 1.5 3.0 3.2 3.1
Chg (QoQ) (0.2) (0.0) 0.1 0.5 0.1 (1.0) (0.1) 0.0 (0.1) (0.1) (0.3) (0.1)
Chg (y-y) 0.3 0.0 0.9 1.7 0.7 (0.0) 1.0 1.3 (0.3) (0.0) 0.4 0.6
ROE 15.4 9.7 9.8 3.8 9.7 4.6 7.2 1.2 14.6 7.6 7.0 8.3
Chg (QoQ) 0.5 (1.2) (1.5) (4.2) (1.6) 0.6 (0.2) (5.6) (0.7) 4.3 (0.3) (1.0)
Chg (y-y) (2.5) (8.2) (4.8) (10.7) (6.5) (3.7) 2.6 (5.8) 1.1 (0.8) (1.3) (3.9)
CAR 25.7 21.0 19.5 16.7 20.8 22.2 19.0 20.9 15.6 27.3 21.0 20.9
Source: Companies

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 8

Exhibit 19. Valuation matrix (1/2)
Ticker BBCA BBRI BMRI BBNI BBTN BDMN BNGA PNBN BJBR Sector Big-4 Non-big-4
Rating BUY BUY BUY BUY BUY HOLD BUY BUY BUY OVERWEIGHT

Target price (IDR) 37,500 4,700 8,500 7,600 2,200 2,800 1,100 1,150 1,500
Target PBV (x) 4.3 2.6 1.8 1.1 1.0 0.6 0.6 0.6 1.1 3.0 3.0 0.7
Share price (IDR) 33,075 4,040 6,325 5,750 1,705 2,760 840 925 1,305
Up(down)side (%) 13.4 16.3 34.4 32.2 29.0 1.4 31.0 24.3 14.9
Total mkt cap. (IDRtn) 815 498 295 107 18 27 21 22 13 1,817 1,716 101
BVPS (IDR) 2021F 8,740 1,807 4,738 7,223 2,189 4,858 1,881 1,911 1,386 34,732 22,508 12,224
EPS (IDR) 2021F 1,193 236 553 752 208 255 115 127 172 3,612 2,735 877
DPS (IDR) 2021F 315 142 332 54 42 65 23 - 95 1,066 842 224
PBV (x) 2021F 3.8 2.2 1.3 0.8 0.8 0.6 0.4 0.5 0.9 2.6 2.7 0.6
PE (x) 2021F 27.7 17.1 11.4 7.6 8.2 10.8 7.3 7.3 7.6 19.9 20.6 8.4
Yield (%) 2021F 1.0 3.5 5.2 0.9 2.4 2.4 2.7 - 7.2 2.4 2.4 2.6
PPOP 2018 38.4 59.8 48.3 27.0 5.3 8.4 7.9 6.3 3.5 204.9 173.6 31.3
(IDRtn) 2019 44.6 65.0 48.5 28.3 4.0 7.9 8.3 6.0 3.1 215.7 186.4 29.2
2020F 44.4 55.2 46.0 25.3 4.0 7.1 7.8 5.7 2.9 198.4 170.9 27.4
2021F 48.0 63.0 50.7 28.5 4.8 7.0 7.7 5.7 3.3 218.7 190.2 28.5
2022F 53.9 73.5 55.8 32.0 5.1 7.5 8.1 6.0 3.8 245.7 215.2 30.5
Net profit 2018 25.9 32.4 25.0 15.0 2.8 3.9 3.5 3.1 1.5 113.1 98.2 14.9
(IDRtn) 2019 28.6 34.4 27.5 15.4 0.2 4.1 3.6 3.3 1.6 118.6 105.8 12.8
2020F 25.6 20.2 18.0 3.8 1.5 1.8 2.3 2.9 1.4 77.4 67.6 9.9
2021F 29.4 29.1 25.8 14.0 2.2 2.4 2.9 3.2 1.7 110.8 98.4 12.4
2022F 34.5 36.5 31.1 16.9 2.6 2.8 3.4 3.4 2.0 133.2 118.9 14.2
PPOP growth 2018 11.1 11.2 11.6 10.8 11.1 (2.7) (3.0) 15.8 (11.0) 10.7 11.2 2.7
(%) 2019 15.9 8.7 0.5 5.0 (24.5) (5.7) 5.2 (4.9) (11.8) 9.5 10.5 (7.4)
2020F (0.3) (15.1) (5.2) (10.7) (0.6) (10.6) (5.9) (5.6) (4.9) (6.1) (6.1) (6.0)
2021F 8.1 14.1 10.2 12.7 20.1 (0.5) (0.6) (0.3) 12.5 10.1 10.5 4.8
2022F 12.3 16.7 10.0 12.2 7.5 6.6 4.8 5.9 15.9 12.9 13.2 7.4
Net profit growth 2018 11.0 11.6 21.2 10.3 (7.3) 6.5 16.9 23.9 27.7 12.9 12.9 12.8
(%) 2019 10.5 6.2 9.9 2.5 (92.5) 3.9 4.6 6.6 0.7 7.4 8.6 (13.0)
2020F (10.5) (41.4) (34.4) (75.3) 596.3 (56.4) (38.1) (11.9) (7.1) (21.6) (27.6) 79.9
2021F 15.1 44.5 43.0 269.1 51.0 37.8 28.5 8.8 15.0 43.5 44.3 29.0
2022F 17.2 25.4 20.5 20.1 18.7 14.9 18.2 6.7 19.8 20.0 20.3 15.1
Loan growth 2018 15.1 14.1 12.3 16.2 19.5 7.4 1.8 7.0 4.6 14.1 14.4 8.0
(%) 2019 9.1 7.5 10.7 8.6 7.6 3.4 3.1 (0.4) 9.1 8.6 8.9 4.0
2020F 2.0 4.9 3.8 3.8 0.5 (2.9) (4.2) (6.4) 6.4 2.9 3.2 (2.1)
2021F 8.3 8.8 8.4 8.2 6.5 5.3 3.1 3.9 8.1 8.3 8.4 5.1
2022F 9.0 8.9 9.1 8.7 7.7 9.8 4.4 4.8 8.1 8.8 9.0 7.0
Deposit growth 2018 8.4 12.2 3.1 12.1 19.3 4.9 4.0 (5.5) (0.2) 8.6 8.8 4.3
(%) 2019 11.0 8.1 11.0 6.1 (2.1) 3.4 1.3 (4.6) 2.7 9.3 9.9 0.1
2020F 12.2 17.2 14.8 18.0 15.8 11.0 6.1 6.3 13.7 14.2 14.4 10.1
2021F 7.5 10.0 7.5 6.3 8.2 6.5 4.4 4.0 8.7 8.0 8.1 6.1
2022F 7.9 10.0 7.8 7.7 8.2 7.9 4.5 5.0 9.1 8.4 8.5 6.8
LDR 2018 85.5 89.3 97.1 86.5 103.3 130.2 98.8 102.6 91.9 89.7 88.7 107.9
(%) 2019 84.1 88.8 96.9 88.9 113.5 130.3 99.3 107.1 97.7 89.3 88.0 111.6
2020F 76.4 79.5 87.6 78.4 98.5 118.3 89.4 94.3 91.4 80.5 79.4 100.1
2021F 77.0 78.6 88.4 79.8 97.0 116.6 88.3 94.2 90.9 80.7 79.6 99.0
2022F 77.8 77.8 89.4 80.6 96.5 118.5 88.2 94.0 90.1 81.0 80.0 99.3
NIM 2018 6.1 7.2 5.5 5.3 4.3 8.9 5.1 4.7 6.4 6.3 6.3 6.1
(%) 2019 6.2 6.7 5.5 4.9 3.3 8.3 5.3 4.8 5.8 6.1 6.2 5.7
2020F 5.8 5.7 4.8 4.3 3.2 8.0 4.9 4.6 5.6 5.5 5.5 5.4
2021F 6.0 6.0 5.1 4.6 3.4 8.0 5.1 4.7 5.7 5.7 5.7 5.6
2022F 6.1 6.4 5.2 4.7 3.4 8.0 5.2 4.7 5.8 5.9 6.0 5.6
Non-int inc. gwt. 2018 27.9 21.6 19.5 0.4 29.4 6.1 10.0 55.7 (15.4) 22.7 22.9 19.2
(%) 2019 14.4 20.3 (5.9) 15.6 1.4 (4.1) 30.7 (20.6) (8.2) 12.0 12.7 (0.0)
2020F 6.0 7.1 7.0 (0.4) 13.1 8.3 6.4 13.6 (3.0) 6.2 6.1 8.5
2021F 11.9 11.7 8.7 9.8 5.4 7.0 4.8 6.0 4.7 10.9 11.2 5.8
2022F 12.2 9.9 9.2 9.9 5.4 5.4 4.8 6.9 4.2 10.6 10.9 5.5
Source: Companies, Bahana forecasts

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 9

Exhibit 20. Valuation matrix (2/2)
Ticker BBCA BBRI BMRI BBNI BBTN BDMN BNGA PNBN BJBR Sector Big-4 Non-big-4
Rating BUY BUY BUY BUY BUY HOLD BUY BUY BUY OVERWEIGHT

Target price (IDR) 37,500 4,700 8,500 7,600 2,200 2,800 1,100 1,150 1,500
Target PBV (x) 4.3 2.6 1.8 1.1 1.0 0.6 0.6 0.6 1.1
Share price (IDR) 33,075 4,040 6,325 5,750 1,705 2,760 840 925 1,305
Up(down)side (%) 13.4 16.3 34.4 32.2 29.0 1.4 31.0 24.3 14.9
Total mkt cap. (IDRtn) 815 498 295 107 18 27 21 22 13 1,817 1,716 101
BVPS (IDR) 2021F 8,740 1,807 4,738 7,223 2,189 4,858 1,881 1,911 1,386 34,732 22,508 12,224
EPS (IDR) 2021F 1,193 236 553 752 208 255 115 127 172 3,612 2,735 877
DPS (IDR) 2021F 315 142 332 54 42 65 23 - 95 1,066 842 224
PBV (x) 2021F 3.8 2.2 1.3 0.8 0.8 0.6 0.4 0.5 0.9 2.6 2.7 0.6
PE (x) 2021F 27.7 17.1 11.4 7.6 8.2 10.8 7.3 7.3 7.6 19.9 20.6 8.4
Yield (%) 2021F 1.0 3.5 5.2 0.9 2.4 2.4 2.7 - 7.2 2.4 2.4 2.6
Non-int inc. to 2018 33.8 23.4 36.6 27.3 17.0 21.7 29.0 21.2 23.6 30.4 30.9 22.5
Total income 2019 34.3 25.9 33.3 29.6 18.9 20.6 33.7 17.6 23.3 30.9 31.4 22.7
(%) 2020F 35.6 29.1 36.1 31.1 21.8 23.1 37.3 20.0 22.3 33.0 33.5 25.0
2021F 36.7 29.2 35.5 30.9 20.7 24.1 37.7 20.7 21.7 33.5 34.0 25.3
2022F 37.1 28.5 35.3 30.7 20.5 24.1 37.4 20.9 20.8 33.4 33.9 25.1
Cost to income 2018 59.1 69.1 69.9 70.9 85.6 78.7 81.0 77.7 85.2 65.5 64.6 81.0
(%) 2019 60.0 71.1 69.9 73.6 98.1 87.3 82.4 77.5 85.1 66.9 65.8 85.8
2020F 64.5 81.6 79.4 92.6 92.7 91.6 88.2 78.9 85.2 74.5 73.8 87.5
2021F 62.2 75.9 73.4 76.3 89.6 87.5 85.2 77.3 84.3 69.9 69.0 84.7
2022F 60.0 73.2 70.8 74.0 88.6 85.9 83.2 76.9 82.5 67.5 66.6 83.4
Credit cost 2018 1.1 2.1 1.8 1.5 0.7 2.3 1.6 1.4 1.8 1.5 1.5 1.6
(%) 2019 1.4 2.4 1.3 1.6 1.4 3.2 1.7 1.2 1.1 1.7 1.7 1.9
2020F 2.1 3.1 2.3 3.7 0.8 3.6 2.5 1.6 1.0 2.5 2.5 2.1
2021F 1.7 2.5 1.6 1.8 0.7 2.7 2.0 1.2 1.0 1.9 1.9 1.7
2022F 1.5 2.4 1.3 1.6 0.6 2.4 1.7 1.2 1.0 1.7 1.7 1.5
NPL ratio 2018 1.4 2.3 2.8 2.0 2.8 2.7 3.1 1.4 1.7 2.0 1.9 2.4
(%) 2019 1.3 2.8 2.4 2.3 4.8 3.0 2.8 1.2 1.6 2.0 2.0 2.7
2020F 1.8 3.4 2.9 4.0 4.7 3.8 3.9 1.6 1.5 2.6 2.6 3.2
2021F 1.9 3.5 3.4 3.5 4.8 3.4 3.6 1.2 1.5 2.8 2.7 3.0
2022F 1.9 3.5 3.2 2.9 4.4 3.2 3.1 1.2 1.5 2.7 2.7 2.7
ROA 2018 3.3 2.7 2.2 2.0 0.9 2.1 1.3 1.5 1.3 2.8 2.8 1.5
(%) 2019 3.3 2.5 2.2 1.9 0.1 2.1 1.3 1.6 1.3 2.7 2.8 1.4
2020F 2.7 1.4 1.4 0.4 0.5 0.9 0.8 1.3 1.1 1.9 2.0 0.9
2021F 2.9 1.9 1.8 1.4 0.7 1.2 0.9 1.4 1.2 2.3 2.4 1.1
2022F 3.2 2.3 2.1 1.6 0.7 1.3 1.0 1.4 1.4 2.5 2.6 1.2
ROE 2018 18.3 18.5 14.4 14.5 11.8 9.8 9.1 8.7 14.5 17.0 17.4 10.4
(%) 2019 17.5 17.7 14.2 13.3 0.9 9.4 8.8 8.4 13.4 16.3 16.7 8.1
2020F 13.9 9.8 8.8 3.1 6.5 3.9 5.1 6.8 11.8 10.9 11.2 6.3
2021F 14.4 13.6 12.1 10.9 9.9 5.3 6.3 6.9 12.8 13.2 13.5 7.6
2022F 15.1 15.7 13.6 11.9 10.8 5.9 7.0 6.8 14.3 14.4 14.8 8.3
CAR 2018 24.0 21.4 20.5 18.5 18.2 22.2 19.7 22.0 19.0 22.2 22.3 20.5
(%) 2019 24.6 22.8 20.9 19.7 17.3 24.2 21.5 23.3 16.3 23.0 23.1 21.2
2020F 21.8 19.5 21.4 18.9 14.8 22.6 21.4 23.4 16.9 20.8 20.9 20.4
2021F 21.7 18.3 22.0 17.1 15.2 23.4 22.0 24.9 17.6 20.5 20.5 21.2
2022F 22.1 86.0 22.6 12.8 15.4 23.3 116.4 26.0 17.4 40.2 40.2 41.1
TIER-1 2018 22.9 20.2 19.3 17.4 16.0 21.4 18.4 20.1 16.6 21.0 21.2 18.9
(%) 2019 23.7 21.7 19.8 18.6 15.6 23.4 20.2 20.8 14.0 22.0 22.1 19.6
2020F 20.7 18.4 20.3 17.8 13.0 21.6 20.0 22.1 14.6 19.7 19.8 18.9
2021F 20.6 17.1 20.8 16.1 13.4 22.4 20.5 23.2 15.3 19.4 19.4 19.7
2022F 21.0 85.5 21.5 12.1 13.7 22.3 114.0 24.0 15.1 39.3 39.3 39.4

Source: Companies, Bahana forecasts

PT. Bahana Sekuritas – Equity Research – Indonesia Banks 10

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PT. Bahana Sekuritas – Equity Research – Indonesia Banks 11

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PT. Bahana Sekuritas – Equity Research – Indonesia Banks 13

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for a stock based on the market price and the formal rating.
"Buy": the price of the security is expected to increase by 10% or more.
"Hold": the price of the security is expected to range from an increase of less than 10% to a decline of less than 5%.
"Reduce": the price of the security is expected to decline by 5% or more.
Sector ratings are based on fundamentals for the sector as a whole. Hence, a sector may be rated “Overweight” even though its constituent stocks are all rated
“Reduce”; and a sector may be rated “Underweight” even though its constituent stocks are all rated “Buy”.
“Overweight”: positive fundamentals for the sector.
“Neutral”: neither positive nor negative fundamentals for the sector.
“Underweight”: negative fundamentals for the sector.
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Relevant Relationships (Bahana Sekuritas)

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PT. Bahana Sekuritas – Equity Research – Indonesia Banks 14