Lending growth for Motorcycle predicted to be slower

Lending growth for Motorcycle (R2) at PT Bank Danamon Indonesia Tbk (BDMN, Rp5.500, NEUTRAL, TP Rp6.000) is predicted to be slower than previously forecast. The assumption, credit growth in 2013 down to 17.4% from 18.2%. The 2013 earnings outlook also down 10% to Rp3,9 trillion from the previous target, as well as with TP of Rp6.100.

The slow R2 lending growth due to the drops in commodity prices and rising prices of subsidized fuel. BDMN subsidiary, PT Adira Multi Finance Tbk (AMDF, Rp8.100) will also increase the share of auto (R4) loans. Non-performing loans (NPL) predicted up to 2.8% in 2013, from a previous prediction of 2.4%.

for Indonesia Market Summaries, 24 June 2013