Bank Jatim - pretax profit of Rp113bn in April vs. Rp100bn/mth in 1Q13 (BJTM; Rp445; Buy; TP Rp575)
Bank Jatim indicated the pretax profit of Rp414bn in the first four months to April, +11% YoY, accounting to 33% of consensus and our full year pretax profit. This translates into Rp113bn pretax profit in the month of April as compared to Rp82bn in April 2012 (+37% YoY). The bank recorded an average pretax profit of Rp100bn/month in 1Q13.
Loan growth was recorded at 14% YoY to Rp19.4tr with consumer loans increased 17% YoY (65% of total loans), commercial loans +10% yoY (17% of total loans) and SME +7% YoY (17% of total). Total deposits increased 10% YoY resulting in higher LDR of 70% vs. 67% in April 2012.
NIM however continued to decline given more growth in lower yield loans such as mortgage which grew 75% YoY. The additional Rp2.3tr of deposits in April alone (+9.5% MoM) which was placed in low yield assets also resulted in lower margin for the bank.
Asset quality still deteriorated with NPL increased to 3.22% in April from 3.15% in March and the main culprit is the commercial loans which NPL increased to 3.43% from 2.95% over the same period. This is due to the late payment from the regional government on the finished projects, resulting in the decline in asset category for the loan facility; this may likely be reversed once the regional government pays the projects. On KUR, while the bank saw outstanding loans decline, NPL in this segment continued to increase, as expected, to 15.1%.
Cost to income declined to 41% in 4M13 from 42% in 1Q13 due to the absence of one-off expenses on staff uniforms in 1Q amounting to Rp20b.
CAR was 23.4% in April, down from 24.7% in March 2013 due to loan expansion.
The stock is trading at 1.1x P/BV and 6.7x P/E 2013F. Maintain Buy.
for Indonesia Market Summaries 27 May 2013
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