Financials & FinTech research, Galliano’s Financials Research

Victor Galliano

Financials & FinTech research

Financials & FinTech, EM & Developed Markets

Galliano’s Financials Research

Galliano's Financials Research provides fundamental research in Emerging Markets financials, including FinTech, as well as financials in select Developed Markets.

The investment style applied is generally value oriented, although Growth At Reasonable Price (GARP) strategies can also be used where appropriate. 

Our investment research approach aim is often contrarian, looking to capitalise on overly sceptical or optimistic consensus views. In terms of valuation techniques, the focus is on PBV ratio to ROE, PE multiples and dividend yield, as well as the application of PEG ratios and, where appropriate, Sum of the Parts (SOTP) valuations.

Equity Bottom-Up

Bank Negara Indonesia Persero / Equity Bottom-Up

<ul>
<li>We downgrade <a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara</a> , our former top pick in Indonesian banks, to a neutral from a buy due to the more concerning credit quality outlook, despite its undemanding valuations</li>
<li>The sacking of the technocratic finance minister increased investor concerns, and the economy’s lacklustre GDP growth – reflected in the surprise rate cut - adds to the banks’ NPL headwinds</li>
<li>Negara’s headline NPL ratio and NPL coverage seem to be reasonable, but these metrics mask more concerning broader credit quality ratios, coupled with the challenge of its low interest margins</li>
</ul>


We downgrade Bank Negara , our former top pick in Indonesian banks, to a neutral from a buy due to the more concerning credit quality outlook, despite its undemanding valuations
The sacking of the technocratic finance minister increased investor concerns, and the economy’s lacklustre GDP growth – reflected in the surprise rate cut - adds to the banks’ NPL headwinds
Negara’s headline NPL ratio and NPL coverage seem to be reasonable, but these metrics mask more concerning broader credit quality ratios, coupled with the challenge of its low interest margins


Bank Negara (BBNI IJ) – Downgrading to Neutral Due to Worsening Bad Loan and Interest Margin Outlook

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.

Thematic (Sector/Industry)

<ul><li>The Rp200tr state funds placed in selected banks could potentially lower CoF by 1-16bps, if no loan growth target is required.</li><li>Otherwise, we see potential downside in NIM and asset quality, especially if economic growth remains stagnant post the stimulus.</li><li>Amid the bottoming liquidity, we retain Neutral rating on the sector with BBCA as our LT stock pick as we remain cautious on asset quality.</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.

The Rp200tr state funds placed in selected banks could potentially lower CoF by 1-16bps, if no loan growth target is required.Otherwise, we see potential downside in NIM and asset quality, especially if economic growth remains stagnant post the stimulus.Amid the bottoming liquidity, we retain Neutral rating on the sector with BBCA as our LT stock pick as we remain cautious on asset quality.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.

Banks: Liquidity Support, Asset Quality Risk: A Double-Edged Sword (NEUTRAL)

Macroeconomics

<ul><li>JCI rallied by a strong 4.8% w-w and was the top performer among the EM markets last week.</li><li>The index’s performance was driven by a combination of large-cap ‘fundamental’ stocks (i.e., BBRI +11% w-w, TLKM 13%, BBCA +5%, BMRI +4%) and illiquid and conglo stocks (DCII, DSSA).</li><li>Market’s rally was also driven by the strong return in foreign investors’ flow which amounted to US$412mn, which put Indonesia among the only market with positive flow among the Asian EMs, with notable inflows into large-cap banks and TLKM. </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.

JCI rallied by a strong 4.8% w-w and was the top performer among the EM markets last week.The index’s performance was driven by a combination of large-cap ‘fundamental’ stocks (i.e., BBRI +11% w-w, TLKM 13%, BBCA +5%, BMRI +4%) and illiquid and conglo stocks (DCII, DSSA).Market’s rally was also driven by the strong return in foreign investors’ flow which amounted to US$412mn, which put Indonesia among the only market with positive flow among the Asian EMs, with notable inflows into large-cap banks and TLKM. 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.

BRIDS Market Pulse: Chart of the Week – Banking Sector’s P/BV Band Chart (5-Year)

<ul><li>JCI finished the week flat (-0.1% w-w), underperforming most of the EM peers.</li><li>Despite positive surprise from 2Q25 GDP numbers, Consumers (-3.7% w-w) and Telco (-0.8%) sectors dragged down the index, offsetting the slight outperformance in Banks(+0.4%), along with correction in large-cap illiquid and conglo stocks (DCII, BRPT, TPIA).</li><li>Foreign funds flow improved to neutral (+US$8mn) compared to outflows in majority of the ASEAN EM peers, with reversal of flows into BBCA and BMRI. </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.

JCI finished the week flat (-0.1% w-w), underperforming most of the EM peers.Despite positive surprise from 2Q25 GDP numbers, Consumers (-3.7% w-w) and Telco (-0.8%) sectors dragged down the index, offsetting the slight outperformance in Banks(+0.4%), along with correction in large-cap illiquid and conglo stocks (DCII, BRPT, TPIA).Foreign funds flow improved to neutral (+US$8mn) compared to outflows in majority of the ASEAN EM peers, with reversal of flows into BBCA and BMRI. 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.

BRIDS Market Pulse: Chart of the Week – JCI P/E Band (10-Year)

<ul><li>JCI finished the week flat (-0.1% w-w), underperforming most of the EM peers.</li><li>Despite positive surprise from 2Q25 GDP numbers, Consumers (-3.7% w-w) and Telco (-0.8%) sectors dragged down the index, offsetting the slight outperformance in Banks(+0.4%), along with correction in large-cap illiquid and conglo stocks (DCII, BRPT, TPIA).</li><li>Foreign funds flow improved to neutral (+US$8mn) compared to outflows in majority of the ASEAN EM peers, with reversal of flows into BBCA and BMRI.</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.

JCI finished the week flat (-0.1% w-w), underperforming most of the EM peers.Despite positive surprise from 2Q25 GDP numbers, Consumers (-3.7% w-w) and Telco (-0.8%) sectors dragged down the index, offsetting the slight outperformance in Banks(+0.4%), along with correction in large-cap illiquid and conglo stocks (DCII, BRPT, TPIA).Foreign funds flow improved to neutral (+US$8mn) compared to outflows in majority of the ASEAN EM peers, with reversal of flows into BBCA and BMRI.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.

BRIDS Market Pulse - Monday, 11 August 2025

Indonesia

PT Bank Mandiri (Persero) Tbk is formed by the merger of four state-owned banks, namely Pt Bank Bumi Daya, PT Bank Dagang Negara, PT Bank Ekspor Import Indonesia (Bank Exim), PT Bank Pembangunan Indonesia (Bank Bapindo). The Bank operates in the commercial banking services.

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Bank Mandiri Persero (BMRI IJ)

Bank Negara (BBNI IJ) – Downgrading to Neutral Due to Worsening Bad Loan and Interest Margin Outlook

We downgrade Bank Negara to a neutral from buy due to the poor macro-economic outlook; it is vulnerable to the worsening credit quality outlook...

Victor Galliano

Banks: Liquidity Support, Asset Quality Risk: A Double-Edged Sword (NEUTRAL)

Amid the bottoming liquidity, we retain Neutral rating on the sector with BBCA as our LT stock pick as we remain cautious on asset quality.

BRI Danareksa Research

BRIDS Market Pulse: Chart of the Week – Banking Sector’s P/BV Band Chart (5-Year)

The index’s performance was driven by a combination of large-cap ‘fundamental’ stocks (i.e., BBRI +11% w-w, TLKM 13%, BBCA +5%, BMRI +4%) and...

BRI Danareksa Research

BRIDS Market Pulse: Chart of the Week – JCI P/E Band (10-Year)

MSCI’s Aug25 review announced the inclusion of DSSA and CUAN into the index, with exclusion of ADRO (into MSCI Small Cap).

BRI Danareksa Research

BRIDS Market Pulse - Monday, 11 August 2025

JCI finished the week flat (-0.1% w-w), underperforming most of the EM peers. Despite positive surprise from 2Q25 GDP numbers...

BRI Danareksa Research

Price Gauge

52-week Range

Market Cap (USDm)

P/E

Dividend (Yield)

Bank Negara (BBNI IJ) – Downgrading to Neutral Due to Worsening Bad Loan and Interest Margin Outlook

We downgrade ​Bank Negara to a neutral from buy due to the poor macro-economic outlook; it is vulnerable to the worsening credit quality outlook...

Victor Galliano

Banks: Liquidity Support, Asset Quality Risk: A Double-Edged Sword (NEUTRAL)

Amid the bottoming liquidity, we retain Neutral rating on the sector with BBCA as our LT stock pick as we remain cautious on asset quality.

BRI Danareksa Research

BRIDS Market Pulse: Chart of the Week – Banking Sector’s P/BV Band Chart (5-Year)

The index’s performance was driven by a combination of large-cap ‘fundamental’ stocks (i.e., BBRI +11% w-w, TLKM 13%, BBCA +5%, BMRI +4%) and...

BRI Danareksa Research

BRIDS Market Pulse: Chart of the Week – JCI P/E Band (10-Year)

MSCI’s Aug25 review announced the inclusion of DSSA and CUAN into the index, with exclusion of ADRO (into MSCI Small Cap).

BRI Danareksa Research

BRIDS Market Pulse - Monday, 11 August 2025

JCI finished the week flat (-0.1% w-w), underperforming most of the EM peers. Despite positive surprise from 2Q25 GDP numbers...

BRI Danareksa Research

We downgrade Bank Negara to a neutral from buy due to the poor macro-economic outlook; it is vulnerable to the worsening credit quality outlook...