Bank Negara Indonesia on track to achieve ~US$850m net profit in FY13F

Thanks to NPLs declining to 2.8% in 2012.

Maybank Kim Eng assumes 20% YoY loan growth for BNI in FY13F, with no drastic changes in composition. Unlike its bigger peers, BNI has a balanced portfolio (36% corporate; 22% consumer; 35%  SME; 7% others), which results in moderate income.

Here's more from Maybank Kim Eng:

On the positive side, NPLs have declined from 8.2% in 2007 to 2.8% in 2012. If BNI continues to maintain its loan portfolio quality, we believe it will be able to achieve our FY13F net profit forecast of IDR8.3t (~US$850m), supported by steady progress in loan recovery of IDR1.9t.

Deposit repricing. BNI successfully repriced all its CASA deposits last year, basing them on progressive interest rates. This move lowered its CoF by 80bps to 2.7%.

No further significant cost reduction is likely in the near future and we estimate the bank’s CoF will remain at the current level in FY13F as its 78% LDR should provide a short respite from aggressive time-deposit gathering.

We forecast BNI’s deposits to grow 12% YoY in FY13F, driven by an increase in savings accounts, which currently make up 39% of its total customer deposits.