Nomura predicts strong micro credit growth recovery for Bank Rakyat Indonesia in FY13F

Thanks to the 6,000 newly-hired loan account officers.

Nomura is still bullish on BRI as its micro credit growth recovery is expected to help sustain its high NIMs although the high ROEs of >30% in FY10-12 are unlikely to be sustainable given its likely low dividend payout and slower earnings growth this year.

Here's more from Nomura:

We raise our earnings forecasts by 3-4% for FY13-14F, on the back of stronger loan growth (+25% y-y) and lower cost/income ratio (47%) in FY12. We expect a trend reversal in interest rates (if any) to be negative for fixed-rate lenders like BRI, but we expect NIM pressure to be mitigated by stronger growth of its very high-margin micro lending.

Micro credit growth recovery
We forecast stronger micro credit growth in FY13F (+23% y-y) on the back of BRI’s recruitment of over 6,000 new loan account officers in 2012 and better financial incentives for micro branch managers.

Growth of BRI’s micro credit customers to 5.5mn in 4Q12 (+4% y-y), after no growth in the previous 4-5 quarters, should provide a base for more sustainable loan growth in the future, we think.