Silver Point

Thomas J. Monaco

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

<p><strong><em>*Weak 4Q20:</em></strong> Bank Central Asia (BBCA.IJ) [BCA] reported 4Q20 results of IDR 7.1 tn, declining IDR 699 bn (9.0%) on a linked quarter basis. Worse yet, when we exclude various non-core items, core operating results declined IDR 4.6 bn (55.5%) over the same period. Results at BCA were highlighted by negative operating jaws; and  </p><p><strong><em>*Credit Challenge, But Modest Earnings Event: </em></strong>By our calculation, we find that 4Q20 net new NPLs amounted to IDR 1.3 tn for an annualized rate of increase of 46.5% - rivaling some of the worst Indian banks. Given the continued breakdown in credit quality which shows no signs of abating, we calculate that reserves are short close to IDR 3.5 tn or about 50% of 4Q20 PBT – which is de minimis relative to the sector and region. </p>

*Weak 4Q20: Bank Central Asia (BBCA.IJ) [BCA] reported 4Q20 results of IDR 7.1 tn, declining IDR 699 bn (9.0%) on a linked quarter basis. Worse yet, when we exclude various non-core items, core operating results declined IDR 4.6 bn (55.5%) over the same period. Results at BCA were highlighted by negative operating jaws; and  *Credit Challenge, But Modest Earnings Event: By our calculation, we find that 4Q20 net new NPLs amounted to IDR 1.3 tn for an annualized rate of increase of 46.5% - rivaling some of the worst Indian banks. Given the continued breakdown in credit quality which shows no signs of abating, we calculate that reserves are short close to IDR 3.5 tn or about 50% of 4Q20 PBT – which is de minimis relative to the sector and region. 

Bank Central Asia – Poor Showing At Indo Bellweather

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

Private Capital Markets

<div>
<div>
<p><a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> has bought a further 18% stake in Indonesia's <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago (ARTO IJ)</a> bringing its total state to 22.16%. The transaction was executed at 1.14x PBV and a significant discount to the last traded price.</p>
<p><a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago (ARTO IJ)</a> has a market capitalization of IDR42.3tn (US$2.9bn), which values Gojek's stake in the bank at IDR9.3tn (US$641m).</p>
<p>Gojek's Indonesia users will in the future be able to open a bank account with <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago (ARTO IJ)</a> and manage their finances through the <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> App. </p>
<p>The <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago (ARTO IJ)</a> deal marks an opportunity for <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> to capitalize on its vast user base, especially through GoPay, to offer customers digital banking products and other financial services.</p>
<p><a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago (ARTO IJ)</a> has already moved its focus to digital banking, targeting SMEs and retail customers. GoPay also recently received investment from <a href="https://www.smartkarma.com/entities/facebook-inc-a" target="_blank" data-smartkarma-citation="entities:665:1" rel="noopener">Facebook Inc A (FB US)</a> and <a href="https://www.smartkarma.com/entities/paypal-holdings-inc" target="_blank" data-smartkarma-citation="entities:4747:1" rel="noopener">Paypal Holdings (PYPL US)</a>, which also provides a strong backing and the potential for collaboration from two heavyweight foreign investors</p>
<div>
<div>For <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ</a>, this will help it develop a process through which it can work with other banks, as well as providing customers with an increasing array of digital financial solutions.</div>
<div></div>
<div>The deal also demonstrates that management is focused on building its competitive advantage in Indonesia rather than being sidelined any merger considerations with <a href="https://www.smartkarma.com/entities/grabtaxi-holdings-pte-ltd" target="_blank" data-smartkarma-citation="entities:26950:1" rel="noopener">Grab (0967655D SP),</a> which seems increasingly unlikely. </div>
<div></div>
</div>
<div>
<p>Gojek is also seen to be on the path to profitability, with all its services generating positive margins on a product basis. <a href="https://www.smartkarma.com/entities/gojek" target="_blank" data-smartkarma-citation="entities:25976:1" rel="noopener">Gojek (1379371D IJ)</a> also recently received US$150m in new money from <a href="https://www.smartkarma.com/entities/telekomunikasi-indonesia" target="_blank" data-smartkarma-citation="entities:1051:1" rel="noopener">Telekomunikasi Indonesia (TLKM IJ),</a> which represented another heavyweight local shareholder on top of <a href="https://www.smartkarma.com/entities/astra-international-tbk-pt" target="_blank" data-smartkarma-citation="entities:46:1" rel="noopener">Astra International (ASII IJ)</a> and Djarum Group. </p>
<p>We look at the background of the <a href="https://www.smartkarma.com/entities/bank-jago-tbk-pt" target="_blank" data-smartkarma-citation="entities:31094:1" rel="noopener">Bank Jago (ARTO IJ)</a> management team below the fold, which seems well-suited to building this future collaboration.</p>
</div>
<p></p>
<p></p>
</div>
<div>
<div>
<div>
<div id="cx_custom">
<div></div>
</div>
<div></div>
</div>
</div>
</div>
</div>
<div>
<div>
<section id="block-dfp-imu2">
<div id="dfp-ad-imu2-wrapper">
<div id="dfp-ad-imu2" data-google-query-id="CKuTmLTB1-0CFXjicwEdmDMHVQ">
<div id="google_ads_iframe_/5908/bt/imu2/garage_0__container__"></div>
</div>
</div>
</section>
</div>
<div>
<section id="block-views-more-block-1"></section>
</div>
<div>
<div>
<div>
<div>
<div>
<div>
<h2></h2>
</div>
</div>
</div>
</div>
</div>
</div>
</div>



Gojek (1379371D IJ) has bought a further 18% stake in Indonesia's Bank Jago (ARTO IJ) bringing its total state to 22.16%. The transaction was executed at 1.14x PBV and a significant discount to the last traded price.
Bank Jago (ARTO IJ) has a market capitalization of IDR42.3tn (US$2.9bn), which values Gojek's stake in the bank at IDR9.3tn (US$641m).
Gojek's Indonesia users will in the future be able to open a bank account with Bank Jago (ARTO IJ) and manage their finances through the Gojek (1379371D IJ) App. 
The Bank Jago (ARTO IJ) deal marks an opportunity for Gojek (1379371D IJ) to capitalize on its vast user base, especially through GoPay, to offer customers digital banking products and other financial services.
Bank Jago (ARTO IJ) has already moved its focus to digital banking, targeting SMEs and retail customers. GoPay also recently received investment from Facebook Inc A (FB US) and Paypal Holdings (PYPL US), which also provides a strong backing and the potential for collaboration from two heavyweight foreign investors

For Gojek (1379371D IJ, this will help it develop a process through which it can work with other banks, as well as providing customers with an increasing array of digital financial solutions.

The deal also demonstrates that management is focused on building its competitive advantage in Indonesia rather than being sidelined any merger considerations with Grab (0967655D SP), which seems increasingly unlikely. 



Gojek is also seen to be on the path to profitability, with all its services generating positive margins on a product basis. Gojek (1379371D IJ) also recently received US$150m in new money from Telekomunikasi Indonesia (TLKM IJ), which represented another heavyweight local shareholder on top of Astra International (ASII IJ) and Djarum Group. 
We look at the background of the Bank Jago (ARTO IJ) management team below the fold, which seems well-suited to building this future collaboration.











































Gojek (1379371D IJ) - Upping the Ante on Financial Services

Research and consultancy, Tabbush Report

Daniel Tabbush

Research and consultancy

Tabbush Report

We provide research and consultancy on Asian banks. Our focus is on what we call “Asian bank research, without the noise.” We are interested in the most critical swing-factors for banks, the NPL and credit cycle, and where we believe there is a gap between perception and reality. We often focus on the less studied components of bank financial statements.  Our research is highly thematic, sometimes examining unlisted banks and companies as a window on mainstream banks. 

Being independent allows us to look at smaller banks, often overlooked by others. Analysis of BIS bank guidelines in the context of Asia, is also a focal point, while we also analyze global banks operating in the region. We use what we believe is the most comprehensive, reliable financials database, SNL Financial. S&P Capital IQ augments our database, with corporate data and CEIC, with economics. 

Asian bank research, without the noise.

<p>We have seen strong profit recovery at many banks globally, for most during the September quarter. Much of this is due to lower credit costs after banks were overly conservative during the March or June quarters. The profit recovery has not fully played out for many. <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia Persero (BBNI IJ)</a> stands out as the largest bank in the country, still reporting a loss in the quarter. We view this as temporary.</p>

We have seen strong profit recovery at many banks globally, for most during the September quarter. Much of this is due to lower credit costs after banks were overly conservative during the March or June quarters. The profit recovery has not fully played out for many. Bank Negara Indonesia Persero (BBNI IJ) stands out as the largest bank in the country, still reporting a loss in the quarter. We view this as temporary.

Bank Negara Indonesia – Only Big Bank With Losses, For Now

Bank Danamon Indonesia / Equity Bottom-Up

<p>Indonesia’s <a href="https://www.smartkarma.com/entities/bank-danamon-indonesia-tbk-pt" target="_blank" data-smartkarma-citation="entities:135:1" rel="noopener">Bank Danamon Indonesia (BDMN IJ)</a> stands out well, on PB of just under 0.5x and market cap/assets of 17%. Peer banks with liquidity, are at PB of 1.5x on average. For banks that appear less expensive on market cap/assets, ROAs are generally inferior to BDMN. At the same time, BDMN is showing some of the most radical improvement in ROA of all banks in the country. The divergence in how the market is viewing BDMN compared with peer banks is substantial, and yet BDMN maintains the highest NIM of any bank with market cap over USD1bn, save the major outlier BTPS at 24%. Where one is trying to identify value in addition to profitability, it is important to note that BTPS is on 216% market cap/assets and 4.5x PB.</p>

Indonesia’s Bank Danamon Indonesia (BDMN IJ) stands out well, on PB of just under 0.5x and market cap/assets of 17%. Peer banks with liquidity, are at PB of 1.5x on average. For banks that appear less expensive on market cap/assets, ROAs are generally inferior to BDMN. At the same time, BDMN is showing some of the most radical improvement in ROA of all banks in the country. The divergence in how the market is viewing BDMN compared with peer banks is substantial, and yet BDMN maintains the highest NIM of any bank with market cap over USD1bn, save the major outlier BTPS at 24%. Where one is trying to identify value in addition to profitability, it is important to note that BTPS is on 216% market cap/assets and 4.5x PB.

Bank Danamon – Profit Transformation Not Recognized

<p><strong><em>*Domination Of Subsidized Indonesian Mortgages:</em></strong> Bank Tabungan Negara (BBTN.IJ) [BBTN] dominates the Indonesian mortgage market with over a one-third of market, and aggregates 45% of Indonesia’s subsidized mortgage market;</p><p><strong><em>*BP Tapera, Additive To Funding: </em></strong>BBTN’s monthly mortgage disbursements were IDR 2.5 tn during September 2020, and likely will continue, in our view, given the greater government support. Recently, the Indonesian government increased the FLPP budget to a record IDR 19.1 tn for 2021, or about 74% higher than its 2020 budget of IDR 11 tn. BP Tapera will only assume this function from PPDPP in 2022, after becoming fully operational by 2021. Despite the promising outlook, the government’s existing housing subsidy programs will remain in place and that BP Tapera is essentially an add-on;  and  </p><p><strong><em>*New Management Restructuring:</em></strong> The new management team have set out that asset quality improvement and retail funding are their main priorities.</p>

*Domination Of Subsidized Indonesian Mortgages: Bank Tabungan Negara (BBTN.IJ) [BBTN] dominates the Indonesian mortgage market with over a one-third of market, and aggregates 45% of Indonesia’s subsidized mortgage market;*BP Tapera, Additive To Funding: BBTN’s monthly mortgage disbursements were IDR 2.5 tn during September 2020, and likely will continue, in our view, given the greater government support. Recently, the Indonesian government increased the FLPP budget to a record IDR 19.1 tn for 2021, or about 74% higher than its 2020 budget of IDR 11 tn. BP Tapera will only assume this function from PPDPP in 2022, after becoming fully operational by 2021. Despite the promising outlook, the government’s existing housing subsidy programs will remain in place and that BP Tapera is essentially an add-on;  and  *New Management Restructuring: The new management team have set out that asset quality improvement and retail funding are their main priorities.

Bank Tabungan Negara – Mortgage Powerhouse

Indonesia

PT Bank Danamon Indonesia Tbk is an Indonesian financial institution that provides a wide range of banking services, including consumer banking, wealth management, and various credit products for individual and corporate customers. The bank offers services such as savings, loans, fund transfers, and Sharia banking. It is headquartered in Jakarta, Indonesia, and was established in 1956.

Price Gauge
52-week Range	0.00 - 0.00
Market Cap (USDm)	0.00
P/E	0.00
Dividend (Yield)	0.00

Bank Danamon Indonesia (BDMN IJ)

Bank Central Asia – Poor Showing At Indo Bellweather

BANK CENTRAL ASIA: BBCA reported 4Q20 results decline of 9.0% linked quarter. Results at BCA were highlighted by negative operating jaws. Net new...

Thomas J. Monaco

Gojek (1379371D IJ) - Upping the Ante on Financial Services

Gojek's recent move to increase its stake in Bank Jago to 22% signals it intends to move into providing a broader range of financial services.

Angus Mackintosh

Bank Negara Indonesia – Only Big Bank With Losses, For Now

We have seen strong profit recovery at many banks globally. The profit recovery has not fully played out for many. We view BBNI's loss in the...

Daniel Tabbush

Bank Danamon – Profit Transformation Not Recognized

Indonesia’s Bank Danamon Indonesia (BDMN IJ) stands out well, on PB of just under 0.5x and market cap/assets of 17%. Peer banks with liquidity, are...

Daniel Tabbush

Bank Tabungan Negara – Mortgage Powerhouse

BANK TABUNGAN NEGARA: Dominance Of Subsidized Mortgage Lending, Funding Additions Into Space, and Management Restructure Under Way.

Thomas J. Monaco

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)