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The Big 4 banks’ 10M24 net profits were in-line with ours and cons, totalling IDR 153.1tn (+8.2% YoY). These banks booked 10M24 aggregate loan growth of 13.1% YoY, leading to 3.3% YoY increase in NII. NIM remained stable MoM, with BBNI showing the most notable improvement. However, aggregate provision expenses rose +18.4% YoY as BBRI booked relatively high CoC of 3.2%, exceeding its FY24 guidance of 3.0%.
Potential rate cuts and lower statutory reserve requirement from BI are expected to improve liquidity and reduce CoF, supporting NIM growth. CoC is likely to remain stable in 2025 as banks already operate at highly efficient credit cost levels. We forecast loan growth of 11-13% in 2025F, compared to 10-12% in 2024F, driven primarily by MSME loans, as fiscal spending shifts focus toward growth and household consumption.
At the moment, we continue to favor banks with higher assets quality, as they will continue to book higher loan growth from high-yielding assets. In addition, these banks are likely to maintain low CoC in current environment. Our top picks for the sector are BMRI (BUY, TP IDR 8,500) and BBCA (BUY, TP IDR 12,500). Risks to our call: 1) slower-than-expected loan growth amid sluggish GDP expansion 2) higher CoC due to deteriorating asset quality and 3) delays in rate cuts.
Samuel Sekuritas Indonesia is a leading Indonesian securities brokerage firm. Established in 1997, the firm has grown to become one of the most respected and trusted financial services companies in the country. With a wide range of services and products, Samuel Sekuritas Indonesia has become a trusted partner to many investors, both institutional and individual.
The company offers a variety of financial services, including equity, debt and derivative securities brokerage services, research and portfolio management, asset management and capital market services, as well as a range of other investment solutions. Samuel Sekuritas Indonesia is also a leader in providing financial education and training, and has established itself as a leading provider of investor relations services.
The company has a strong research capability and is committed to providing its clients with up-to-date and reliable market analysis and recommendations. It also has a team of experienced and knowledgeable professionals who are dedicated to providing quality service to its clients. As a result, Samuel Sekuritas Indonesia has become a preferred partner for many investors in Indonesia.
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