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>Bank Negara stands out versus its peers for its value attributes, its attractive PEG ratio, and its improving pre- and post-provision returns with top NPL coverage relative to its peers</li>
<li>Bank Mandiri remains a buy for its quality attributes, its premium returns, and its well-controlled CoR; Mandiri has a far better valuations-to-returns mix than mega-cap BCA </li>
<li>Bank Rakyat comes off the sell list; it registered improved pre-provision returns in 1Q24, and although cost of risk worsened, post-provision returns were maintained along with its NPL coverage ratio</li>
</ul>


Bank Negara stands out versus its peers for its value attributes, its attractive PEG ratio, and its improving pre- and post-provision returns with top NPL coverage relative to its peers
Bank Mandiri remains a buy for its quality attributes, its premium returns, and its well-controlled CoR; Mandiri has a far better valuations-to-returns mix than mega-cap BCA 
Bank Rakyat comes off the sell list; it registered improved pre-provision returns in 1Q24, and although cost of risk worsened, post-provision returns were maintained along with its NPL coverage ratio


Indonesian Banks Screener; Negara Stands Out on Value, Growth Potential and Improving Return Trends

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

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia (BBNI IJ)</a> booked a solid set of 1Q2024 results driven by +9.6% YoY growth in loans, despite being hampered by higher cost of funds amid tighter liquidity.</li>
<li>Loan growth was driven by corporate lending, with corporate SOE lending showing the strongest growth and consumer loans. Funding was driven by CASA growth which limited the squeeze on NIMs. </li>
<li>
<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia</a> booked strong growth in fee income and a reduction in provisions which helped to offset the margin squeeze. Valuations remain attractive on 1.2x FY2024E PBV.</li>
</ul>



Bank Negara Indonesia (BBNI IJ) booked a solid set of 1Q2024 results driven by +9.6% YoY growth in loans, despite being hampered by higher cost of funds amid tighter liquidity.
Loan growth was driven by corporate lending, with corporate SOE lending showing the strongest growth and consumer loans. Funding was driven by CASA growth which limited the squeeze on NIMs. 

Bank Negara Indonesia booked strong growth in fee income and a reduction in provisions which helped to offset the margin squeeze. Valuations remain attractive on 1.2x FY2024E PBV.


Bank Negara Indonesia (BBNI IJ) - The Bank Has Levers to Pull On

India BFSI - Long-Short - Equity Research Analyst

Raj S, CA, CFA

Artoval Advisors

Art’o’val stands for Art of Valuation. Artoval Advisors LLP is a professionally run advisory firm catering to various financial advisory services including Valuation, Investment Research, Training, Accounting, CFO Services and other ancillary services.

We are passionate about what we do and strongly believe in working with our clients as their extended teams. With Artoval Advisors as their trusted partner, our clients find it easy to achieve efficiency in service delivery without compromising on quality.

True Art of Valuation

<ul>
<li>
<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> has stated its target of achieving an FY28e ROE of 20%, with ambition to join the other three big Indonesian Banks already doing it. </li>
<li>Although the current results are not on par with the other three, the bank has outlined its strategy to reach the target (1% credit cost; 37% CIR by 2028 exit)</li>
<li>Projecting a gradual re-rating to align with peers by 2028 and extrapolating book value growth over the 5-year period provides a shareholder return of 30% CAGR</li>
</ul>



Bank Negara Indonesia Persero (BBNI IJ) has stated its target of achieving an FY28e ROE of 20%, with ambition to join the other three big Indonesian Banks already doing it. 
Although the current results are not on par with the other three, the bank has outlined its strategy to reach the target (1% credit cost; 37% CIR by 2028 exit)
Projecting a gradual re-rating to align with peers by 2028 and extrapolating book value growth over the 5-year period provides a shareholder return of 30% CAGR


BBNI IJ Initiation: On a Rewarding Journey to 20% ROE

<ul>
<li>
<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">Bank Negara Indonesia (BBNI IJ)</a> remains a laggard amongst the top 4 banks in Indonesia in valuation terms, with improving returns leading to some upward re-rating. </li>
<li>The bank continues to grow its high-quality corporate loans and consumer banking with a dramatic increase in its mobile banking users, which is helping to grow its low-cost CASA. </li>
<li>
<a href="https://www.smartkarma.com/entities/bank-negara-indonesia-persero" target="_blank" data-smartkarma-citation="entities:8285:1" rel="noopener">BBNI</a> remains an interesting proxy for Indonesia's economy, with digital banking helping to drive returns. Valuations remain below peers but the bank is now approaching fair value.</li>
</ul>



Bank Negara Indonesia (BBNI IJ) remains a laggard amongst the top 4 banks in Indonesia in valuation terms, with improving returns leading to some upward re-rating. 
The bank continues to grow its high-quality corporate loans and consumer banking with a dramatic increase in its mobile banking users, which is helping to grow its low-cost CASA. 

BBNI remains an interesting proxy for Indonesia's economy, with digital banking helping to drive returns. Valuations remain below peers but the bank is now approaching fair value.


Bank Negara Indonesia (BBNI IJ) - Big on Aspirations

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.

<ul>
<li>BBNI’s FY23 net profit of Rp20.9tr (+14% yoy) was in-line with ours/ consensus, supported by lower provisions amid flattish NII.  </li>
<li>While FY23 loan grew in-line with our expectation, pressure on CoF lingered, with NIM slipping to 4.4% in 4Q23, from 4.8% in 3Q23. </li>
<li>We trimmed our FY24F NP by 4%, resulting in lower FV PBV of 1.5x. Maintain Buy rating, but with a lower TP of Rp6,800. </li>
</ul>
<p><em>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.</em></p>


BBNI’s FY23 net profit of Rp20.9tr (+14% yoy) was in-line with ours/ consensus, supported by lower provisions amid flattish NII.  
While FY23 loan grew in-line with our expectation, pressure on CoF lingered, with NIM slipping to 4.4% in 4Q23, from 4.8% in 3Q23. 
We trimmed our FY24F NP by 4%, resulting in lower FV PBV of 1.5x. Maintain Buy rating, but with a lower TP of Rp6,800. 

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.

Bank Negara Indonesia (BBNI IJ) - Credit Quality Improvement and Higher CoF Remain

Indonesia

PT Bank Negara Indonesia (Persero) Tbk is a state-owned bank that conducts commercial and consumer banking services.

Bank Negara Indonesia Persero (BBNI IJ)

Indonesian Banks Screener; Negara Stands Out on Value, Growth Potential and Improving Return Trends

Negara is our value pick, with improving returns and the best NPL coverage of the peer group, and we maintain Mandiri as a buy for its best...

Victor Galliano

Bank Negara Indonesia (BBNI IJ) - The Bank Has Levers to Pull On

Bank Negara Indonesia booked strong growth in fee income and a reduction in provisions which helped to offset the margin squeeze. Valuations remain...

Angus Mackintosh

BBNI IJ Initiation: On a Rewarding Journey to 20% ROE

BBNI IJ has stated its target of achieving an FY28e ROE of 20%, just like peers do now. Being involved in the journey can be very rewarding for...

Raj S, CA, CFA

Bank Negara Indonesia (BBNI IJ) - Big on Aspirations

BBNI remains an interesting proxy for Indonesia's economy, with digital banking helping to drive returns. Valuations remain below peers but the...

Angus Mackintosh

Bank Negara Indonesia (BBNI IJ) - Credit Quality Improvement and Higher CoF Remain

BBNI’s FY23 net profit of Rp20.9tr (+14% yoy) was in-line with ours/ consensus, supported by lower provisions amid flattish NII.

BRI Danareksa Research