Professional Documents
Culture Documents
Equity Research
Sector growth momentum remains Sweet spot of credit cycle with sizeable
robust loan recovery potential
We believe robust loan growth/fee income Relatively low interest rates, stable FX rate/macro
expansion will likely continue in 2011 on the back environment, along with the banks’ enhanced risk
of a promising macro outlook (GSe of 6.2% real management, should help banks keep credit cost
GDP growth in 2011), increasing credit demand, low and likely recover some written-off bed debt
and Bank Indonesia’s (BI) growth bias. Consumer as well in 2011. However, the sector could be off
loans could still likely outgrow corporate loans, the sweet spot earlier than expected, if a potential
although we highlight slowdown in vehicle oil price rally leads to significant pick-up in
finance as inevitable given the high basis in 2010. inflation, accelerating interest rate hikes.
We expect 22% loan growth in 2011 vs. BI’s target
of 22%-24%. Top Buys: Mandiri & BNI
Our top picks in the sector are Bank Mandiri
CoF increase, competition, and reference (BMRI.JK) and Bank Negara Indonesia (BBNI.JK)
rate change lead to some NIM pressure given its continued turnaround efforts to improve
Although inflationary pressures have slightly productivity and risk management. Both banks have
eased off recently, banks are still facing NIM just completed capital raisings and have low LDR,
pressure on tighter sector-wide liquidity, implying less need to aggressively raise funding
increasing cost of funds (particularly for more cost; their strengthened capital adequacy provides
price-sensitive corporate customers), fierce more capital buffer for higher loan growth, and both
could benefit from recovery from their Rp 33tn/23tn Vincent Chang
competition on good-quality loan +852-2978-6681 vincent.chang@gs.com
corp/commercial customers, and potential written-off loan books. Key Risks: Severe loan Goldman Sachs (Asia) L.L.C.
reference rate change for floating-rate bonds. We pricing competition; Asset quality deterioration.
expect BTN/BRI’s NIM to come down from 4Q10 Justin Chen
+886(2)2730-4190 justin.chen@gs.com
peak, which was driven by PSAK 50/55 adoption.
Goldman Sachs (Asia) L.L.C., Taipei Branch
The Goldman Sachs Group, Inc. does and seeks to do business with companies covered in its research reports. As a result, investors should be aware that the firm may have a conflict of
interest that could affect the objectivity of this report. Investors should consider this report as only a single factor in making their investment decision. For Reg AC certification, see the
end of the text. Other important disclosures follow the Reg AC certification, or go to www.gs.com/research/hedge.html. Analysts employed by non-US affiliates are not
registered/qualified as research analysts with FINRA in the U.S.
Table of contents
Prices in this report are based on the market close of April 15, 2011.
Stance-at-a-glance
Price 12-month P/B P/E EPS BVPS ROE ROA
GS 15-Apr TP 11E 12E 11E 12E 11E 12E 11E 12E 11E 12E 11E 12E
Ticker Rating (Rp) (Rp) (X) (X) (X) (X) (Rp) (Rp) (Rp) (Rp) (%) (%) (%) (%)
BMRI.JK Mandiri Buy 6,800 7,500 2.4 2.2 13.1 11.4 520 594 2,801 3,098 19 20 2.5 2.5
BBRI.JK BRI Neutral 6,150 6,400 3.3 2.7 11.8 10.0 522 618 1,853 2,286 31 30 2.9 3.0
BDMN.JK Danamon Sell 6,450 5,250 2.7 2.4 16.7 14.0 387 462 2,387 2,712 17 18 2.6 2.7
BBCA.JK BCA Neutral 7,300 6,700 4.5 3.9 18.3 15.7 400 466 1,620 1,876 26 27 2.8 2.9
BBTN.JK BTN Neutral 1,770 1,700 2.1 1.9 14.2 11.2 125 157 833 951 16 18 1.5 1.6
BBNI.JK BNI Buy 4,000 4,600 2.0 1.8 13.2 10.7 303 374 1,991 2,244 16 18 2.2 2.4
Average 2.8 2.5 14.5 12.2 20.9 21.7 2.4 2.5
Note: All target prices are CAMELOT based. Key risks: Upside-Robust loan/NIM expansion; Downside- Severe asset quality deterioration, investors turning risk averse in exposure at emerging markets
Source: Datastream, Goldman Sachs Research estimates, Gao Hua Research estimates.
Source: Datastream, Goldman Sachs Research estimates, Gao Hua Research estimates
% 35.0 % US$
20 160
140
30.0
16
120
25.0
12 100
20.0
15.38 80
15.0 8 6.84 60
0 0
0.0
Sep-04
Sep-09
Jan-03
Apr-04
Feb-05
Jan-08
Apr-09
Feb-10
Jul-05
May-06
Oct-06
Mar-07
Jul-10
Jun-03
Nov-03
Dec-05
Aug-07
Jun-08
Nov-08
Dec-10
1Q01
3Q01
1Q02
3Q02
1Q03
3Q03
1Q04
3Q04
1Q05
3Q05
1Q06
3Q06
1Q07
3Q07
1Q08
3Q08
1Q09
3Q09
1Q10
3Q10
Real GDP yoy growth Gross GDP yoy growth Crude oil price (US$)-RHS CPI inflation yoy %-LHS Core inflation yoy %-LHS
3500 4,000
3000
6,000
2500
8,000
2000
1500 10,000
1000
12,000
500
0 14,000
Apr-96
Feb-97
Apr-01
Feb-02
Apr-06
Feb-07
Apr-11
Oct-98
Oct-03
Oct-08
Dec-97
Aug-99
Jun-00
Dec-02
Aug-04
Jun-05
Dec-07
Aug-09
Jun-10
16,000
Jan-97
Jan-98
Jan-99
Jan-00
Jan-01
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-10
Jan-11
Jakarta Composite Index
- Working capital 354 415 529 681 701 769 766 820 825 827 858 885 859 -2.9% 33.8%
- Investment 133 150 185 256 297 336 339 326 328 333 331 348 341 -1.9% 17.9%
- Consumer 212 232 290 377 448 500 510 512 525 533 536 551 563 2.2% 11.2%
Total 699 796 1,004 1,314 1,447 1,605 1,616 1,658 1,678 1,693 1,724 1,784 1,763 -1.1% 22.6%
By Currency
- Rupiah 575 649 802 1,071 1,246 1,390 1,400 1,433 1,449 1,460 1,477 1,523 1,500 -1.5% 20.7%
- Foreign currency 123 148 202 243 201 215 216 225 228 233 248 261 263 1.0% 35.1%
Total 699 797 1,004 1,314 1,447 1,605 1,616 1,658 1,678 1,693 1,724 1,784 1,763 -1.1% 22.6%
30
Mfging industry
Vehicles 15%
20
5%
Electricity, Gas
and Water Supply
10 2%
Housingrelated
9% Construction
0 4%
-10
Services
9% Trade
-20 18%
State-owned banks Private national Foreign banks/joint banks
-30 Financial,
Transport and
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jan-11
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jul-10
Ownership &
Jan-10
Business Services Communication
7% 4%
40
30
30
20
20
10
10
0
0
-10 -10
-20 -20
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jan-11
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jul-10
Jan-10
Jul-10
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jan-10
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-11
Source: Bank Indonesia. Source: Bank Indonesia.
Deposit breakdown by types of bank (as of Jan 2011) Deposit breakdown by types of deposit (as of Jan 2011)
Foreign/joint
banks
9%
Demand deposit
22%
State-owned
banks
36%
Time deposit
46%
Private National
banks
46% Saving deposit
32%
Regional govt
banks
8%
90%
120%
80%
100%
70%
60% 80%
50%
60%
40%
40%
30%
20% 20%
Jul-10
Jul-02
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jan-10
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-11
Jul-10
Jul-03
Jul-04
Jul-05
Jul-06
Jul-07
Jul-08
Jul-09
Jan-10
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
Jan-11
State-owned banks Regional/govt banks Private national
Foreign banks/joint banks Rural banks
Rupiah LDR FCY LDR Sector LDR (Rp & FCY)
16 22.0
14
20.0
12
18.0
10
8.74 16.0
8
7.05
14.0
6.75
6 6.37
12.0
Jan-10
May-10
Sep-10
May-02
Sep-02
May-03
Sep-03
May-04
Sep-04
May-05
Sep-05
May-06
Sep-06
May-07
Sep-07
May-08
Sep-08
May-09
Sep-09
Jan-11
Jan-02
Jan-03
Jan-04
Jan-05
Jan-06
Jan-07
Jan-08
Jan-09
4
May-10
Nov-10
Nov-05
Nov-06
Nov-07
Nov-08
Nov-09
Feb-10
Aug-10
Aug-05
Feb-06
May-06
Aug-06
Feb-07
May-07
Aug-07
Feb-08
May-08
Aug-08
Feb-09
May-09
Aug-09
Feb-11
State-owned banks Regional govt banks
BI rate SBI 3M rate Indo 10yr Govt. bond rate JIBOR 3M Private National banks Foreign/joint banks
13.0 13.0
11.0 11.0
9.0 9.0
7.0 7.0
5.0 5.0
3.0 3.0
May-10
May-02
May-03
May-04
May-05
May-06
May-07
May-08
May-09
Jan-10
Sep-10
Jan-11
Jan-10
May-10
Sep-10
Jan-02
Sep-02
Jan-03
Sep-03
Jan-04
Sep-04
Jan-05
Sep-05
Jan-06
Sep-06
Jan-07
Sep-07
Jan-08
Sep-08
Jan-09
Sep-09
May-02
May-03
May-04
May-05
May-06
May-07
May-08
May-09
Jan-11
Jan-02
Sep-02
Jan-03
Sep-03
Jan-04
Sep-04
Jan-05
Sep-05
Jan-06
Sep-06
Jan-07
Sep-07
Jan-08
Sep-08
Jan-09
Sep-09
State-owned banks Regional govt banks State-owned banks Regional govt banks
Private National banks Foreign/joint banks Private National banks Foreign/joint banks
Indonesia banks historical NIM and the correlation with BI policy rate
% 15.0 15 %
Due to PSAK 50/55
impact
13.0 13
11.0 11
BI Rate-LHS
9.0 9
Danamon
BRI
7.0 7 BCA
BNI
Mandiri
5.0 5 BTN
3.0 3
1.0 1
Jul-05
Oct-05
Jul-06
Oct-06
Jul-07
Oct-07
Jul-08
Oct-08
Jul-09
Oct-09
Jul-10
Oct-10
Jan-06
Apr-06
Jan-07
Apr-07
Jan-08
Apr-08
Jan-09
Apr-09
Jan-10
Apr-10
% 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
Mandiri 6.00 5.40 5.47 5.30 4.90 5.30 5.10 5.20 6.00 5.80
BCA 6.26 6.55 7.12 6.88 6.59 6.40 5.14 5.14 5.21 5.29
BRI 10.61 10.18 9.46 9.29 9.21 9.14 9.37 9.40 9.50 10.77
Danamon 11.40 10.30 10.00 11.50 13.10 13.40 11.70 11.60 11.40 10.60
BTN 6.20 4.30 4.10 4.60 5.00 5.90 5.80 6.00 5.70 6.50
BNI 6.20 6.30 6.20 6.10 6.00 6.10 5.80 5.80 5.90 5.80
Source: Bank Indonesia, Company data
Asset quality
9.0%
8.4% % 2008 2009 1Q10 2Q10 3Q10 4Q10 2010
8.0%
Mandiri 4.7 2.8 2.6 2.5 2.6 2.4 2.4
7.0% BCA 0.6 0.7 0.8 0.8 0.8 0.6 0.6
6.0% BRI 2.8 3.5 4.1 4.3 4.3 2.8 2.8
5.0% Danamon 2.3 4.5 4.0 3.4 3.1 3.0 3.0
4.0%
4.1% BTN 3.2 3.4 4.0 4.1 4.2 3.3 3.3
2.7%
BNI 4.9 4.7 4.6 4.3 4.4 4.3 4.3
3.0%
2.0%
1.0%
0.0%
May-03
May-04
May-05
May-06
May-07
May-08
May-09
Jan-03
Sep-03
Jan-04
Sep-04
Jan-05
Sep-05
Jan-06
Sep-06
Jan-07
Sep-07
Jan-08
Sep-08
Jan-09
Sep-09
May-10
Jan-11
Sep-10
Jan-10
Source: Bank Indonesia Source: Company data. Goldman Sachs Research estimates.
bps 2006 2007 2008 2009 1Q10 2Q10 3Q10 4Q10 2010
Bank Mandiri 301 131 161 105 34 55 60 -11 131
Bank Central Asia 91 24 147 175 -25 2 30 13 21
Bank Rakyat Indonesia 204 169 176 278 71 79 81 47 254
Bank Negara Indonesia 190 297 376 322 33 68 36 2 128
Bank Danamon 235 186 265 444 75 72 78 57 252
Bank Tabungan Negara 39 -1 2 16 25 18 14 14 64
Total avg. 177 135 188 223 35 49 50 20 142
Note: Total avg. is simple average of six banks’ credit cost.
Capital adequacy
Bank % 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10
Tier 1 ratio 13.9 12.8 13.8 12.6 12.8 12.4 12.4 11.2 10.3 10.5
Mandiri
CAR 17.0 15.7 15.4 14.0 14.2 15.4 16.0 14.5 13.3 13.4
Tier 1 ratio 15.4 15.3 16.4 15.6 15.5 14.5 16.7 14.9 14.8 12.6
BCA
CAR 16.0 15.8 17.4 16.5 16.3 15.3 17.5 15.6 15.8 13.5
Tier 1 ratio 12.2 12.2 13.9 13.7 12.1 12.2 13.2 12.0 11.6 12.0
BRI
CAR 13.4 13.2 14.9 14.7 13.5 13.1 15.4 14.1 13.5 13.9
Tier 1 ratio 14.8 14.4 13.2 23.1 23.4 23.0 22.1 16.8 15.4 15.0
Danamon
CAR 16.6 15.4 16.9 22.6 20.9 20.7 19.7 18.2 16.4 16.0
Tier 1 ratio 11.8 11.4 12.1 11.3 10.9 17.9 19.2 17.7 16.0 15.8
BTN
CAR 16.8 16.1 16.7 15.6 15.0 21.8 20.2 18.7 17.0 16.7
Tier 1 ratio 10.4 9.8 11.3 10.8 12.2 10.2 10.5 11.1 10.2 16.3
BNI
CAR 13.9 13.5 15.0 14.3 14.6 13.7 13.3 13.8 12.4 18.7
Source: Company data.
Rp tn 400 Rp tn 250
350
372
229
200
207
300 321
308
250 150
200
139
217
123
100
150
94
128
100
72
50
103
53
47
47
45
93
50
69
67
63
-
0
BRI
BCA
BII
BTN
Mandiri
BNI
Panin
Permata
CIMB Niaga
Danamon
BRI
BCA
Niaga
BII
BTN
Panin
Mandiri
BNI
Permata
Danamon
CIMB
Rp tn 350 % 16.0
300 14.0
14.0
296
12.0
12.7
250
263
257
11.4
10.0
10.9
10.4
200
10.2
9.4
8.0
9.2
9.0
179
150
7.3
6.0
100
4.0
105
50 2.0
69
69
55
54
41
0 0.0
BRI
BRI
BCA
BCA
BII
BII
BTN
Panin
BNI
Mandiri
BTN
Panin
Mandiri
BNI
Permata
CIMB Niaga
Permata
CIMB Niaga
Danamon
Danamon
0
10
20
30
40
50
60
70
0.0
1.0
2.0
3.0
4.0
5.0
6.0
7.0
April 19, 2011
-
200
400
600
800
1,000
1,200
1,400
1,600
1,800
0
1
2
3
4
5
6
7
8
9
10
No. of Branches
18
April 19, 2011 Indonesia: Banks
Appendix
Historical correlation between inflation vs. policy rate vs. JCI banking index
20.0 600.0
18.0
500.0
16.0
14.0
400.0
12.0
10.0 300.0
8.0
200.0
6.0
4.0
100.0
2.0
- 0.0
Sep-05
Sep-06
Sep-07
Sep-08
Sep-09
Sep-10
Jan-06
Mar-06
May-06
Jan-07
Mar-07
May-07
Jan-08
Mar-08
May-08
Jan-09
Mar-09
May-09
Jan-10
Mar-10
May-10
Jan-11
Mar-11
Jul-05
Nov-05
Jul-06
Nov-06
Jul-07
Nov-07
Jul-08
Nov-08
Jul-09
Nov-09
Jul-10
Nov-10
policy rate-LHS Inflation-LHS Jakarta Finance index-RHS
Source: Datastream
Research summary
Indonesia: Banks: PSAK 50/55 now behind; secular growth & robust earnings to continue
FY10 result impacted by accounting rule change (aka. PSAK 50/55)
Indonesian banks on average posted 44% yoy net earnings growth in FY10. However, the impact of the PSAK 50/55 implementation
through 2010 makes it challenging to compare qoq sequential growth trends, especially given the differing timings of the rule’s
adoption among banks. We summarize the key accounting rule changes and their impact in this report.
Cost of fund increase, competition, and reference rate change lead to some NIM pressure
Although inflationary pressures have slightly eased off recently, banks are still facing NIM pressure on tighter sector-wide liquidity,
increasing cost of funds (particularly for more price-sensitive corporate customers), fierce competition on good-quality loan
corp/commercial customers, and potential reference rate change for floating-rate bonds. We expect BTN/BRI’s NIM to come down
from 4Q10 peak, which was driven by PSAK 50/55 adoption.
Bank Mandiri (BMRI.JK): Above expectations on bad loan recovery; robust core earning; Buy
What surprised us
Bank Mandiri reported its 4Q10/FY10 net earnings of Rp2.8tn/Rp9.2tn, 22%/6% higher than GS forecast and 27%/7% than IBES-based
consensus forecast. Key highlights: (1) 5.8% NIM, 20bps down from 3Q10, but 50bp up yoy; It plans to install another 2,000 ATMs (vs.
6,500 ATMs it has now) in 2011 to further strengthen its deposit franchise; (2) 23% yoy loan growth, particularly strong in consumer
and commercial & SME segments where BRI/BNI slowed its growth to fix risk management; (3) 18% yoy fee income growth as it
continues to invest and strengthen its transactional banking capabilities; (4) Stable asset quality, gross NPL down to 2.4%, coverage
ratio up to 194%, special-mentioned loans down to 7.2% from 9.7% in 2009, with an additional write-back of Rp 0.5tn in 4Q10,
leading to a negative credit cost of 11bps in 4Q10. 2011 growth guidance: loan: 20- 22%; fee income: 20-25%; asset quality: remains
optimistic; NIM: pending the implementation related to the reference rate change for variable-rate bonds (from SBI to SPN), for
which Mandiri is still in discussions with the government. This could negatively impact Mandiri’s interest income by Rp450-650bn
(3%-4% of GS 2011E pre-tax earnings).
Bank Central Asia (BBCA.JK): Inline with expectation; solid franchise/execution, but full valuation
What surprised us
BCA reported FY10 net earnings of Rp 8.48tn, in line with GS estimate of Rp8.54tn. Key highlights: (1) Continued NIM expansion
(8bp qoq) thanks to its strong deposit franchise (76% in low-cost CASA, 7bp qoq funding cost decline); (2) Robust loan growth of
24.6% yoy, driven by consumer (+32% yoy) and commercial/SME (+27% yoy); LDR rose 2.6ppt qoq to 55.5%; (3) Solid asset quality,
0.6% NPL, 395% coverage ratio; FY10 net credit cost was only 21bp; (4) Higher opex in 4Q10 (+15% qoq) reflecting seasonality, but
its FY10 cost-to-income (C/I) ratio stayed at 47%; (5) mgmt stated it might lower cash dividend payout ratio to shore up its CAR
(13.5% in 4Q10) to preserve capital for future growth. 2011 guidance - loan growth: 15-20%; deposit: 10-15%; NIM: flat to slightly up;
fee income: 10-15% (depending on FX activities).
Risks: Robust loan/NIM expansion (upside); Severe asset quality deterioration (downside).
Bank Negara Indonesia (BBNI.JK): Above expectations on recovery; turnaround efforts continue;
Buy
What surprised us
Bank Negara Indonesia reported its 4Q10/FY10 net earnings of Rp 1.0tn/Rp 4.1tn, 15%/4% higher than our forecast. Key positives: (1)
Net credit cost dropped to 177bps in FY10 vs. 335bps in FY09, thanks to Rp2.2tn recovery. We expect continuous asset quality
improvement, as evidenced by 22% yoy special mention loan balance decline, and lower new NPL formation (68% qoq decline); (2)
8% qoq loan growth, with strong momentum across all different segments; on the back of strengthened capital base (tier 1 ratio:
16.6%), it targets 17%-20% loan growth in 2011. Key negatives: (1) Opex soared 21% yoy, driving up its cost-to-income ratio to 51%
(from 46% in 3Q10); (2) NIM slightly declined to 5.8% in 4Q10. Even though its asset/deposit mix should allow it to expand its NIM in
a rate-hike environment, it keeps a modest guidance for 2011 (5.5%-6%) as the political environment prevents it from repricing its
loan too quickly; (3) Deposit growth was just 3% yoy (low-cost CASA deposit 10.4% yoy growth) as its LDR is still below BI’s target
range of 78%-100%. Besides, it disclosed that its Tokyo branch has about US$250m assets, of which only about US$20m loans was
extended to Japanese enterprises (0.1% of its total asset, 3% of GSe FY11 pre-tax earning), while the rest was to borrowers outside
of Japan.
Bank Danamon (BDMN.JK): Below expectations on weak NII; Sell on NIM contraction in 2011
What surprised us
Bank Danamon reported 4Q10/FY10 net earnings of Rp680bn/ Rp2,883bn, which were 12.4%/ 3.2% below our forecasts of Rp776bn/
Rp2,979bn. Key positives: (1) Loan growth remained robust (+7% qoq, 31% yoy) mainly driven by corporate lending (+38% yoy),
vehicle loans (+60% yoy), and micro finance (+25% yoy); (2) Credit costs improved to 3.2% (from 3.8% in 3Q) as provisions for mass
market stabilized. Key negatives: (1) NIM contracted significantly to 10.6% (11.4% in 3Q). Despite the rising CASA deposits (which
outgrew term deposits by 7%), its funding cost did not reflect the deposit mix improvement, increasing to 5.7% (vs. 5.4% in 3Q10).
Loan yield stayed flat at 16% due to intense competition; (2) Operating expenses rose by 20% qoq, raising the cost-to-income ratio
to 58%.
and another 50bp in 2012; Danamon’s relatively high loan-to-deposit ratio implies it has to rely more on wholesale funding in a tight
liquidity environment. Further, it would be more difficult/time-consuming for banks to pass on funding cost increase to retail
customers, in our view; (2) more normalized vehicle loan growth in 2011E, as the strong momentum in 2010 was off a lower basis,
which is unlikely to sustain as the government plans to cut the use of subsidized fuel for private cars in 2Q11. We slightly cut our
2010E-12E EPS by 3%/1%/1% on lower NIM, but keep our 12-m Camelot-based TP at Rp5,250 (2.2X 2011E BVPS, 13.6X 2011E EPS).
Our 2011/12E EPS is 11%/12% lower than IBES-based consensus.
Key risks: unexpected NIM expansion and credit cost decline leading to earnings growth; M&A risk.
(Vincent Chang, Justin Chen, Feb 18, 2011)
Current price below ex-growth value at floor; we see this as an attractive buying opportunity for value-focused investors.
Non-int Op. Op. Pre-prov Loan Pretax Yoy chg Loan prov. Yoy chg in
Deposits Loans NII NPAT EPS NIM ROA ROE
income revs exps. op. profit provs. profits in NIM /loans Prov./loans
Indonesia (FY 2010A) 14.7 22.2 17.2 41.7 25.7 23.5 32.3 (20.3) 39.4 58.4 51.3 7.4 0.1 1.9 (0.3) 2.3 22.2
Bank Central Asia 13.2 22.2 (7.9) 35.4 4.5 12.9 (1.9) (64.0) 19.1 24.6 22.7 5.3 (1.1) 0.5 0.1 2.8 27.4
Bank Danamon 17.5 27.8 (2.9) nm 23.8 29.0 18.5 (27.5) 68.8 88.2 87.9 11.3 (0.7) 2.6 (0.0) 2.7 16.8
Bank Mandiri 13.4 22.9 19.4 41.3 25.0 16.6 32.0 nm 29.1 28.8 30.7 5.3 0.1 1.4 (0.2) 2.2 22.3
Bank Negara Indonesia 3.1 12.4 5.3 19.8 9.4 20.7 (2.7) (1.0) (2.7) 65.1 48.0 5.8 (0.2) 3.0 (0.5) 1.7 15.7
Bank Rakyat Indonesia 28.4 21.6 42.7 39.1 42.2 34.7 48.5 11.3 50.7 57.0 56.9 10.8 1.6 2.7 (0.5) 3.2 35.9
Bank Tabungan Negara 12.7 26.6 46.6 72.8 49.5 27.3 99.1 nm 71.2 86.7 61.4 5.9 1.1 1.4 (0.4) 1.4 15.4
Indonesia (FY 2011E) 15.8 21.6 16.4 3.6 13.5 13.0 15.2 7.2 15.7 21.4 17.0 7.1 (0.3) 1.7 (0.3) 2.4 21.3
Bank Central Asia 13.5 21.7 23.0 2.6 15.4 10.5 19.7 40.2 14.3 14.9 14.9 5.5 0.2 0.6 0.1 2.8 26.5
Bank Danamon 18.0 18.3 13.6 8.1 12.0 9.5 14.7 15.1 11.6 12.9 12.7 10.5 (0.8) 2.6 (0.0) 2.6 16.9
Bank Mandiri 13.5 21.0 18.7 3.3 14.2 25.5 6.0 0.9 15.0 31.6 18.3 5.4 0.1 1.1 (0.2) 2.5 21.5
Bank Negara Indonesia 11.2 18.1 17.1 20.7 18.2 9.9 29.2 (3.7) 29.2 38.0 25.5 6.0 0.2 2.4 (0.5) 2.2 16.1
Bank Rakyat Indonesia 17.4 22.7 7.4 3.7 7.0 11.0 3.9 1.3 8.0 12.3 12.3 9.5 (1.2) 2.2 (0.5) 2.9 31.3
Bank Tabungan Negara 21.1 27.7 18.9 (17.0) 14.2 11.8 17.6 (10.6) 15.8 18.6 18.6 5.6 (0.2) 1.0 (0.4) 1.5 15.8
Indonesia (FY 2012E) 16.2 20.8 18.3 10.0 16.6 12.9 20.5 19.0 18.7 19.7 19.7 7.1 0.0 1.6 (0.3) 2.5 21.7
Bank Central Asia 13.6 20.8 19.6 12.4 17.3 15.9 18.3 38.2 16.5 16.5 16.5 5.6 0.1 0.7 0.1 2.9 26.6
Bank Danamon 15.6 17.7 17.0 6.8 14.0 12.3 15.9 11.2 19.5 19.5 19.5 10.4 (0.0) 2.4 (0.0) 2.7 18.1
Bank Mandiri 13.5 21.3 18.2 14.8 17.3 15.7 18.7 16.1 10.4 14.3 14.3 5.5 0.1 1.1 (0.2) 2.5 20.1
Bank Negara Indonesia 11.3 17.3 16.4 11.3 14.8 9.3 21.0 1.9 21.0 23.2 23.2 6.1 0.2 2.1 (0.5) 2.4 17.6
Bank Rakyat Indonesia 16.4 20.9 18.0 9.5 17.0 10.3 22.4 31.3 18.3 18.3 18.3 9.5 (0.1) 2.4 (0.5) 3.0 29.9
Bank Tabungan Negara 26.8 26.9 20.6 5.3 19.1 13.6 26.6 15.5 26.4 26.4 26.4 5.5 (0.1) 0.9 (0.4) 1.6 17.7
2.5 25
14
+1SD +1 SD
2.0 20 12
Avg=10.8X
Average = 1.6x
10
1.5 15
-1SD
8 -1 SD
1.0 10
6
0.5 5
4
- 0 2
Source: Company data, Goldman Sachs Research estimates. Source: Company data, Goldman Sachs Research estimates.
BCA 12m forward P/B (2004-ytd) BCA 12m forward P/E (2004-ytd)
(X)
12-mo
ROE (RHS) ROE 18
forward
(X) BCA P/B (LHS) (%)
5.0 45
16
4.5 40 +1 SD
4.0 +1SD 14
35
6
1.0 10
0.5 5 4
Source: Company data, Goldman Sachs Research estimates. Source: Company data, Goldman Sachs Research estimates.
BRI 12m forward P/B (2004-ytd) BRI 12m forward P/E (2004-ytd)
(X)
12-mo 18
ROE
forward
(X) (%)
4.5 45
ROE (RHS) 16
BRI P/B (LHS)
4.0 40
14
3.5 35
+1SD +1 SD
12
3.0 30
Average = 2.6x 10 Average, 9.5
2.5 25
8
2.0 20
-1SD
-1 SD
6
1.5 15
1.0 10 4
0.5 5 2
Source: Company data, Goldman Sachs Research estimates. Source: Company data, Goldman Sachs Research estimates.
Danamon 12m forward P/B (2004-ytd) Danamon 12m forward P/E (2004-ytd)
(X)
12-mo
ROE
forward
(X) (%)
4.0 ROE (RHS)
40 26
Danamon P/B (LHS)
3.5 35
22
3.0 +1SD 30 +1 SD
18
2.5 25
Average = 2.2x
Avg.=14.3X
2.0 20 14
-1SD
1.5 15
10 -1 SD
1.0 10
6
0.5 5
- 0 2
Source: Company data, Goldman Sachs Research estimates. Source: Company data, Goldman Sachs Research estimates.
BNI 12m forward P/B (2004-ytd) BNI 12m forward P/E (2004-ytd)
(X)
12-mo
ROE
forward
(X) (%) 34
2.5 ROE (RHS)
30
BNI P/B (LHS)
2.15 30
25
2.0
26
+1SD 20
22
+1SD
1.5
Avg. : 1.3
15 18
10
0.5
5
6
0.33
-1SD
- 0 2
Source: Company data, Goldman Sachs Research estimates. Source: Company data, Goldman Sachs Research estimates.
BTN 12m forward P/B (2004-ytd) BTN 12m forward P/E (2004-ytd)
X 2.9 X 19
+2 SD
2.6 17 + 2SD
+1 SD
2.3 15
+ 1SD
2 13
Average=2.0X
Average=13.6X
1.7 11
-1 SD
9 - 1SD
1.4
-2 SD 7 - 2SD
1.1
5
0.8
Sector Average/Sum 2008 nm 27.2 nm 5.30 20.3 1.2 21 34 19 18 19 17 21 52 11 10 8.8 2.7 184 200 20 7.71 52 1.86 78.3
2009 nm 25.7 nm 4.33 20.2 1.4 15 15 20 3 17 13 21 8 18 10 10.5 2.9 202 210 18 7.51 51 1.90 78.9
(chart to right shows 2010E nm 16.9 nm 3.50 23.6 1.7 17 24 20 47 29 24 39 (27) 57 52 11.0 2.4 203 206 24 7.71 49 2.45 84.1
Jakarta Composite Index) 2011E nm 14.7 nm 2.99 22.4 2.8 17 22 16 0 13 14 12 9 18 15 11.4 2.6 202 175 22 7.32 49 2.46 87.8
28.5% 2012E nm 12.3 nm 2.58 22.5 3.1 17 22 19 10 17 14 20 22 19 19 11.4 2.6 211 174 21 7.32 48 2.53 90.6
BCA (Neutral) 2008 239.6 29.8 966 7.40 26.4 1.4 11 nm 25 33 27 10 43 nm 29 31 9.5 0.6 432 nm 28 6.55 42 2.49 56.6
Curr. Price 7,150 2009 283.5 25.2 1,160 6.16 26.6 1.5 17 9 20 22 21 24 18 28 18 18 9.9 0.7 496 189 29 6.40 43 2.58 52.7
12 mnth TP 6,700 2010E 348.0 20.5 1,400 5.11 27.4 1.6 13 22 (8) 35 4 13 (2) (64) 25 23 10.5 0.6 427 62 37 5.29 47 2.79 56.9
Impl. Upside -6% 2011E 399.7 17.9 1,620 4.41 26.5 2.5 14 22 23 3 15 11 20 40 15 15 10.7 0.7 425 72 33 5.50 45 2.81 61.0
TP Basis 4.13XPB11e 25.4% 2012E 465.8 15.4 1,876 3.81 26.6 2.9 14 21 20 12 17 16 18 38 17 17 11.0 0.7 438 81 32 5.60 44 2.89 64.9
Danamon (Sell) 2008 229.5 28.5 1,587 4.13 14.3 1.8 28 27 17 (1) 13 30 (3) 81 (28) (30) 9.9 2.2 106 337 18 11.10 56 1.56 92.9
Curr. Price 6,550 2009 182.7 35.9 1,884 3.48 11.6 1.9 (9) (5) 22 (33) 12 1 26 59 0 (20) 16.0 4.3 81 421 10 12.00 51 1.49 96.9
12 mnth TP 5,250 2010E 343.2 19.1 2,196 2.98 16.8 1.4 17 28 (3) nm 24 29 19 (28) 88 88 15.6 3.0 111 322 30 11.30 53 2.66 105.4
Impl. Upside -20% 2011E 386.8 16.9 2,387 2.74 16.9 3.0 18 18 14 8 12 9 15 15 13 13 14.8 3.2 141 290 29 10.46 52 2.56 105.7
TP Basis 2.23XPB11e 22.4% 2012E 462.3 14.2 2,712 2.42 18.1 2.1 16 18 17 7 14 12 16 11 20 20 14.7 3.2 152 272 27 10.42 51 2.67 107.6
Mandiri (Buy) 2008 250.8 26.7 1,435 4.67 17.8 1.3 17 26 19 34 23 14 32 41 22 22 8.5 4.7 147 216 28 5.45 47 1.57 60.4
Curr. Price 6,700 2009 336.0 19.9 1,646 4.07 21.8 1.3 11 14 20 8 17 13 20 (62) 35 34 8.9 2.8 225 66 26 5.22 45 1.90 62.1
12 mnth TP 7,500 2010E 439.3 15.3 2,267 2.96 22.3 2.0 13 23 19 41 25 17 32 nm 29 31 10.6 2.4 220 160 29 5.28 42 2.18 67.4
Impl. Upside 12% 2011E 519.9 12.9 2,801 2.39 21.5 3.9 13 21 19 3 14 25 6 1 32 18 12.5 2.3 202 131 26 5.42 46 2.50 71.9
TP Basis 2.71XPB11e 29.8% 2012E 594.3 11.3 3,098 2.16 20.1 4.4 14 21 18 15 17 16 19 16 14 14 12.2 2.2 186 126 26 5.53 46 2.49 76.8
BRI (Neutral) 2008 241.9 25.2 907 6.72 28.5 1.4 22 41 17 37 20 21 18 51 23 20 9.1 2.8 180 248 15 10.18 49 2.65 79.9
Curr. Price 6,100 2009 296.4 20.6 1,106 5.52 29.5 1.7 27 29 23 (3) 19 9 28 nm 23 23 8.6 3.5 157 359 12 9.14 45 2.60 81.3
12 mnth TP 6,400 2010E 465.0 13.1 1,487 4.10 35.9 2.3 28 22 43 39 42 35 49 11 57 57 9.1 2.7 204 309 12 10.77 43 3.18 77.0
Impl. Upside 5% 2011E 522.2 11.7 1,853 3.29 31.3 3.0 17 23 7 4 7 11 4 1 12 12 9.7 3.3 179 258 12 9.54 45 2.95 80.5
TP Basis 3.54XPB11e 40.2% 2012E 617.9 9.9 2,286 2.67 29.9 3.5 16 21 18 10 17 10 22 31 18 18 10.4 3.3 204 276 11 9.49 42 3.01 83.6
BTN (Neutral) 2008 67.7 25.7 484 3.59 14.7 0.4 30 43 15 (14) 11 9 14 37 7 7 6.8 3.2 54 -2 11 5.28 67 1.05 101.8
Curr. Price 1,740 2009 65.1 26.7 725 2.40 11.5 0.8 28 27 16 21 16 20 9 nm 14 (4) 9.3 3.4 51 17 11 4.77 69 0.95 101.3
12 mnth TP 1,700 2010E 105.1 16.6 740 2.35 15.4 1.5 13 27 47 73 50 27 99 nm 87 61 9.4 3.3 52 178 13 5.90 59 1.44 113.7
Impl. Upside -2% 2011E 124.6 14.0 833 2.09 15.8 1.8 21 28 19 (17) 14 12 18 (11) 19 19 9.1 3.4 66 126 10 5.65 57 1.47 119.9
TP Basis 2.03XPB11e 13.7% 2012E 157.5 11.0 951 1.83 17.7 2.3 27 27 21 5 19 14 27 15 26 26 8.6 3.4 75 114 8 5.55 55 1.57 120.0
BNI (Buy) 2008 80.8 48.9 1,020 3.87 7.5 0.8 12 27 33 (17) 14 (5) 50 63 36 27 7.6 4.8 104 483 27 6.26 53 0.63 71.1
Curr. Price 3,950 2009 163.4 24.2 1,260 3.14 14.4 0.2 16 8 12 21 15 11 19 (9) nm nm 8.4 4.6 121 345 28 6.01 52 1.16 66.7
12 mnth TP 4,600 2010E 241.8 16.3 1,953 2.02 15.7 1.3 3 12 5 20 9 21 (3) (1) 65 48 13.3 4.0 122 316 31 5.80 57 1.72 72.6
Impl. Upside 16% 2011E 303.4 13.0 1,991 1.98 16.1 2.2 11 18 17 21 18 10 29 (4) 38 25 13.5 3.9 148 271 31 5.98 53 2.16 77.1
TP Basis 2.31XPB11e 77.3% 2012E 373.7 10.6 2,244 1.76 17.6 3.1 11 17 16 11 15 9 21 2 23 23 13.6 3.8 161 234 30 6.14 50 2.39 81.3
Prices, for 12-mnth performance, taken on weekly basis, from Apr 13, 2010 through Apr. 14, 2011.
Source: Datastream,.
Reg AC
I, Vincent Chang, hereby certify that all of the views expressed in this report accurately reflect my personal views about the subject company or companies and its or their securities. I also certify that
no part of my compensation was, is or will be, directly or indirectly, related to the specific recommendations or views expressed in this report.
Investment Profile
The Goldman Sachs Investment Profile provides investment context for a security by comparing key attributes of that security to its peer group and market. The four key attributes depicted are: growth,
returns, multiple and volatility. Growth, returns and multiple are indexed based on composites of several methodologies to determine the stocks percentile ranking within the region's coverage
universe.
The precise calculation of each metric may vary depending on the fiscal year, industry and region but the standard approach is as follows:
Growth is a composite of next year's estimate over current year's estimate, e.g. EPS, EBITDA, Revenue. Return is a year one prospective aggregate of various return on capital measures, e.g. CROCI,
ROACE, and ROE. Multiple is a composite of one-year forward valuation ratios, e.g. P/E, dividend yield, EV/FCF, EV/EBITDA, EV/DACF, Price/Book. Volatility is measured as trailing twelve-month
volatility adjusted for dividends.
Quantum
Quantum is Goldman Sachs' proprietary database providing access to detailed financial statement histories, forecasts and ratios. It can be used for in-depth analysis of a single company, or to make
comparisons between companies in different sectors and markets.
GS SUSTAIN
GS SUSTAIN is a global investment strategy aimed at long-term, long-only performance with a low turnover of ideas. The GS SUSTAIN focus list includes leaders our analysis shows to be well
positioned to deliver long term outperformance through sustained competitive advantage and superior returns on capital relative to their global industry peers. Leaders are identified based on
quantifiable analysis of three aspects of corporate performance: cash return on cash invested, industry positioning and management quality (the effectiveness of companies' management of the
environmental, social and governance issues facing their industry).
Disclosures
Regulatory disclosures
Additional disclosures required under the laws and regulations of jurisdictions other than the United States
The following disclosures are those required by the jurisdiction indicated, except to the extent already made above pursuant to United States laws and regulations. Australia: This research, and any
access to it, is intended only for "wholesale clients" within the meaning of the Australian Corporations Act. Canada: Goldman Sachs & Co. has approved of, and agreed to take responsibility for, this
research in Canada if and to the extent it relates to equity securities of Canadian issuers. Analysts may conduct site visits but are prohibited from accepting payment or reimbursement by the company
of travel expenses for such visits. Hong Kong: Further information on the securities of covered companies referred to in this research may be obtained on request from Goldman Sachs (Asia) L.L.C.
India: Further information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (India) Securities Private Limited; Japan: See below. Korea: Further
information on the subject company or companies referred to in this research may be obtained from Goldman Sachs (Asia) L.L.C., Seoul Branch. Russia: Research reports distributed in the Russian
Federation are not advertising as defined in the Russian legislation, but are information and analysis not having product promotion as their main purpose and do not provide appraisal within the
meaning of the Russian legislation on appraisal activity. Singapore: Further information on the covered companies referred to in this research may be obtained from Goldman Sachs (Singapore) Pte.
(Company Number: 198602165W). Taiwan: This material is for reference only and must not be reprinted without permission. Investors should carefully consider their own investment risk. Investment
results are the responsibility of the individual investor. United Kingdom: Persons who would be categorized as retail clients in the United Kingdom, as such term is defined in the rules of the Financial
Services Authority, should read this research in conjunction with prior Goldman Sachs research on the covered companies referred to herein and should refer to the risk warnings that have been sent
to them by Goldman Sachs International. A copy of these risks warnings, and a glossary of certain financial terms used in this report, are available from Goldman Sachs International on request.
Brazil: Disclosure information in relation to CVM Instruction 483 is available at http://www.gs.com/worldwide/brazil/gir/index.html. Where applicable, the Brazil-registered analyst primarily responsible
for the content of this research report, as defined in Article 16 of CVM Instruction 483, is the first author named at the beginning of this report, unless indicated otherwise at the end of the text.
European Union: Disclosure information in relation to Article 4 (1) (d) and Article 6 (2) of the European Commission Directive 2003/126/EC is available at
http://www.gs.com/client_services/global_investment_research/europeanpolicy.html which states the European Policy for Managing Conflicts of Interest in Connection with Investment Research.
Japan: Goldman Sachs Japan Co., Ltd. is a Financial Instrument Dealer under the Financial Instrument and Exchange Law, registered with the Kanto Financial Bureau (Registration No. 69), and is a
member of Japan Securities Dealers Association (JSDA) and Financial Futures Association of Japan (FFAJ). Sales and purchase of equities are subject to commission pre-determined with clients plus
consumption tax. See company-specific disclosures as to any applicable disclosures required by Japanese stock exchanges, the Japanese Securities Dealers Association or the Japanese Securities
Finance Company.
General disclosures
This research is for our clients only. Other than disclosures relating to Goldman Sachs, this research is based on current public information that we consider reliable, but we do not represent it is
accurate or complete, and it should not be relied on as such. We seek to update our research as appropriate, but various regulations may prevent us from doing so. Other than certain industry reports
published on a periodic basis, the large majority of reports are published at irregular intervals as appropriate in the analyst's judgment.
Goldman Sachs conducts a global full-service, integrated investment banking, investment management, and brokerage business. We have investment banking and other business relationships with a
substantial percentage of the companies covered by our Global Investment Research Division. Goldman Sachs & Co., the United States broker dealer, is a member of SIPC (http://www.sipc.org).
Our salespeople, traders, and other professionals may provide oral or written market commentary or trading strategies to our clients and our proprietary trading desks that reflect opinions that are
contrary to the opinions expressed in this research. Our asset management area, our proprietary trading desks and investing businesses may make investment decisions that are inconsistent with the
recommendations or views expressed in this research.
We and our affiliates, officers, directors, and employees, excluding equity and credit analysts, will from time to time have long or short positions in, act as principal in, and buy or sell, the securities or
derivatives, if any, referred to in this research.
This research is not an offer to sell or the solicitation of an offer to buy any security in any jurisdiction where such an offer or solicitation would be illegal. It does not constitute a personal
recommendation or take into account the particular investment objectives, financial situations, or needs of individual clients. Clients should consider whether any advice or recommendation in this
research is suitable for their particular circumstances and, if appropriate, seek professional advice, including tax advice. The price and value of investments referred to in this research and the income
from them may fluctuate. Past performance is not a guide to future performance, future returns are not guaranteed, and a loss of original capital may occur. Fluctuations in exchange rates could have
adverse effects on the value or price of, or income derived from, certain investments.
Certain transactions, including those involving futures, options, and other derivatives, give rise to substantial risk and are not suitable for all investors. Investors should review current options
disclosure documents which are available from Goldman Sachs sales representatives or at http://www.theocc.com/about/publications/character-risks.jsp. Transactions cost may be significant in option
strategies calling for multiple purchase and sales of options such as spreads. Supporting documentation will be supplied upon request.
All research reports are disseminated and available to all clients simultaneously through electronic publication to our internal client websites. Not all research content is redistributed to our clients or
available to third-party aggregators, nor is Goldman Sachs responsible for the redistribution of our research by third party aggregators. For all research available on a particular stock, please contact
your sales representative or go to http://360.gs.com.
Disclosure information is also available at http://www.gs.com/research/hedge.html or from Research Compliance, 200 West Street, New York, NY 10282.
Copyright 2011 Goldman Sachs.
No part of this material may be (i) copied, photocopied or duplicated in any form by any means or (ii) redistributed without the prior written consent of The Goldman Sachs
Group, Inc.