53720717

April 19, 2011
Indonesia Financials Fact Sheet
Secular loan growth continues; Near term NIM pressure likely;

Top picks: Mandiri and BNI
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.
The Goldman Sachs Group, Inc. Global Investment Research

April 19, 2011 Indonesia: Banks
Table of contents
Asia financials valuation summary 3

Recent share price performance 4
Key Macro indicators 5
Key loan data 6
Loan growth breakdown 7
Breakdown of private deposit outstanding 8
Deposit growth & breakdown 9
Indonesia banking sector loan-to-deposit ratio 10
Individual loan & deposit breakdown 11
Key rates and system loan spread data 12
Asset quality 14
Capital adequacy 16
Appendix 19
Research summary 21
Target prices, ex-growth floors, and CAMELOT ceilings 25
Dupont analysis – Breakdown of ROA as a percentage of average assets 26
EPS growth drivers 27
12-month forward-looking valuation charts 28
Indonesia Banks one page summary 31
Prices in this report are based on the market close of April 15, 2011.
Goldman Sachs Global Investment Research 2

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.
Asia financials valuation summary

Ave shr price P/B (X) ROE (%) P/PPOP (X) P/E (X) Loan YoY NII gwth (%) Non-NII gwth (%) EPS gwth (%)
perf YTD, % 2011E 2011E 2011E 2011E 2011E 2012E 2011E 2012E 2011E 2012E 2011E 2012E
China H-shr banks 10.6 1.8 21.3 5.6 9.1 18.6 16.2 29.0 17.5 25.5 23.2 26.5 20.8
HK banks (4.2) 1.7 12.5 11.4 14.1 17.3 16.1 11.6 15.5 28.8 16.0 11.1 17.9
India banks 2.6 2.4 18.4 8.3 15.2 26.8 25.7 24.3 25.9 10.4 19.2 22.9 22.0
Indonesia banks 10.6 2.8 21.3 8.7 14.5 21.6 20.8 16.4 18.3 3.6 10.0 17.0 19.7
Japan banks (8.9) 0.7 6.7 4.6 11.2 (0.5) 0.8 3.3 (1.3) (15.9) 2.0 (11.4) 1.4
Korea banks (4.3) 0.9 12.3 3.8 7.5 6.2 7.4 7.6 6.2 (31.1) 10.7 23.0 11.5
Singapore banks 2.9 1.4 11.3 9.1 13.1 11.9 9.6 6.7 14.0 1.0 6.5 3.4 14.8
Taiwan banks (3.0) 1.4 10.1 9.1 14.5 8.3 7.1 13.3 11.7 10.0 6.3 26.6 11.3
Note: Based on the closing prices on April 13, 2011
Source: Datastream, Goldman Sachs Research estimates, Gao Hua Research estimates.

Recent share price performance

Ticker Name Rating Price % chng 52-week Price Absolute Price Performance (%)
15-Apr-11 52wk high High Low 1-wk 1-mo 3-mo YTD 1-yr
Indonesia (sector avg) (6.9) 0.2 13 21 10 37
BBCA.JK Bank Central Asia Neutral 7,300 0.0 7,300 4,925 4.3 10 21 14 26
BDMN.JK Bank Danamon Sell 6,450 (7.2) 6,950 4,650 0.0 2 22 13 19
BMRI.JK Bank Mandiri Buy 6,800 (4.6) 7,129 4,769 (2.9) 13 20 6 32
BBNI.JK Bank Negara Indonesia Buy 4,000 (14.9) 4,700 2,180 0.6 9 19 3 80
BBRI.JK Bank Rakyat Indonesia Neutral 6,150 (2.4) 6,300 3,850 (2.4) 21 19 17 50
BBTN.JK Bank Tabungan Negara Neutral 1,770 (12.6) 2,025 1,120 1.7 21 25 8 13
China H-share banks (HKD) (7.3) (0.4) 9 7 11 4
China A-share banks (CNY) (10.0) 2 11 11 15 (10)
China brokers (CNY, HKD) (27.1) 0.1 6 9 9 (26)
China A-shr insurance (CNY) (18.4) 3.4 10 5 3 (11)
China H-shr insurance (HKD) (11.3) 0.8 10 (3) (3) 3
Hong Kong (sector avg) (13.8) (2.0) 2 (10) (3) 17
India (sector avg) (13.3) 0.6 11 16 2 29
Japan (sector avg) (24.9) (1.8) 7 (11) (9) (20)
Korea (sector avg) (16.7) (2.5) 4 (3) (2) 7
Singapore (sector avg) (8.9) (1.0) 8 (2) 1 (2)
Taiwan (sector avg) (10.6) (4.1) 6 (7) (5) 20
Thailand (sector avg) (2.0) 0.2 12 5 10 42
Malaysia (sector avg) (8.1) (2.3) 2 (6) (2) 14
Source: Datastream, Goldman Sachs Research estimates, Gao Hua Research estimates

Key Macro indicators

Indonesia GDP yoy growth (%, since 2001) CPI inflation (Headline & Core) vs. crude oil price
% 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
10.0 6.89 4.36 40

4
5.0 20
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
Source: Datastream Source: Datastream
Jakarta Composite Index Indonesia Rupiah exchange rate
Index 2,000 USD/IDR

(inverted)
4000
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
Source: Datastream Source: Datastream

Key loan data

Loan outstanding (Rp & FCY), Rp bn 2005 2006 2007 2008 2009 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 YTD YoY
By Group of banks
- State-owned banks 249 281 344 458 534 579 579 591 595 599 609 630 616 -2.2% 15.9%
- Regional/govt banks 45 56 72 96 121 133 135 137 139 140 143 143 143 -0.1% 20.3%
- Private national 290 329 426 545 593 673 685 707 715 724 742 775 766 -1.2% 29.5%
- Foreign banks/joint banks 99 113 142 189 171 189 185 190 195 196 197 201 204 1.3% 22.0%
- Rural banks 16 17 20 25 28 31 32 33 33 33 33 34 34 0.8% 19.9%
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%
By Economic sectors
- Agriculture 38 46 57 68 77 83 87 89 89 89 91 93 92 -0.9% 42.8%

- Mining 8 14 25 31 42 51 50 52 53 52 56 60 59 -2.2% 46.2%
- Mfging industry 170 183 204 270 246 263 257 262 259 257 263 274 271 -1.3% 14.6%
- Electricity, Gas and Water Supply 5 7 7 18 24 25 24 24 29 30 31 34 34 0.9% 30.0%
-Construction 27 33 44 58 64 61 61 63 64 65 67 63 61 -3.5% 18.9%
- Trade 135 164 215 260 302 295 317 323 328 327 333 346 326 -6.0% 40.3%
-Transport and Communication 20 26 37 62 73 85 73 75 74 75 75 75 74 -1.8% -14.0%
-Financial, Ownership & Business Services 73 78 109 152 152 110 110 117 121 123 129 137 131 -4.1% 50.8%
-Services 9 12 13 15 17 131 126 141 136 142 144 150 153 2.1% 42.3%
-Housing - - - - - 129 126 127 128 131 134 136 137 0.5% 21.7%
-Flat and Apartment - - - - - 3 3 3 4 4 4 4 4 2.5% 208.5%
-Shophouse - - - - - 6 6 7 8 7 7 8 9 4.4% 133.1%
-Vehicles - - - - - 75 73 82 83 79 78 80 81 1.4% 53.8%
-Others 214 234 292 380 450 288 303 293 303 312 313 322 332 3.0% -1.2%
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%
By Type of loans
- 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%
Source: Bank Indonesia.

Loan growth breakdown

Loan growth yoy Loan breakdown by economic sectors (as of January 2011)
% Agriculture
60 Total: Rp 1,763tn
5% Mining
3%
50
Others
40 19%
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%
Source: Bank Indonesia. Source: Bank Indonesia.

Breakdown of private deposit outstanding

Deposit outstanding (Rp & Fcy), Rp bn 2005 2006 2007 2008 2009 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 YTD YoY
State-owned banks 392 436 524 593 715 723 707 710 724 738 759 857 810 -5.5% 17.2%
- Demand deposit 64 76 110 91 124 133 123 126 122 123 126 174 154 -11.6% 26.7%
- Saving deposit 136 159 208 237 278 271 271 274 283 283 291 322 312 -3.3% 19.4%
- Time deposit 193 201 205 265 313 319 313 310 319 332 343 361 345 -4.5% 11.6%
Regional govt banks 71 113 129 138 147 193 194 189 198 198 192 178 190 6.9% 23.4%
- Demand deposit 37 59 65 67 61 88 84 78 85 78 74 60 74 23.7% 9.0%
- Saving deposit 17 25 33 37 43 37 39 39 40 42 43 53 47 -10.9% 22.6%
- Time deposit 17 29 31 34 43 68 71 72 74 79 75 65 69 6.1% 44.3%
Private National banks 477 541 631 730 825 899 912 924 948 970 995 1,034 1,036 0.2% 25.1%
- Demand deposit 88 100 127 136 154 183 187 183 184 191 203 198 200 1.0% 26.5%
- Saving deposit 124 143 187 206 259 271 276 286 297 301 306 322 322 0.0% 25.3%
- Time deposit 265 298 317 387 412 444 449 455 468 479 486 514 514 0.0% 24.4%
Foreign/joint banks 122 123 160 201 200 209 199 201 204 203 207 205 206 0.7% 3.8%
- Demand deposit 39 41 53 65 68 70 69 70 74 71 76 73 76 4.6% 11.1%
- Saving deposit 3 5 9 16 23 29 31 31 31 31 31 31 31 -0.3% 22.9%
- Time deposit 79 78 99 120 110 109 99 100 98 101 101 101 99 -1.7% -5.6%
Rural govt banks 14 16 19 21 26 28 28 28 29 30 30 31 32 2.1% 22.5%
- Demand deposit - - - - - - - - - - - - - NM NM
- Saving deposit 4 5 6 7 8 9 9 9 9 9 9 10 10 1.8% 19.6%
- Time deposit 10 11 13 14 17 19 19 20 20 21 21 21 22 2.3% 23.8%
Total deposit 1,076 1,229 1,463 1,682 1,914 2,051 2,040 2,052 2,104 2,139 2,183 2,305 2,274 -1.3% 19.8%
by Deposit types
- Demand deposit 228 276 355 359 408 474 462 457 465 463 478 504 503 -0.2% 21.2%
- Saving deposit 284 336 443 503 611 617 625 639 659 665 680 739 722 -2.2% 22.3%
- Time deposit 564 617 664 820 895 960 952 956 979 1,011 1,025 1,062 1,049 -1.3% 17.5%
by Currency
- Rupiah 891 1,047 1,249 1,403 1,613 1,729 1,711 1,724 1,769 1,807 1,849 1,970 1,948 -1.1% 22.0%
- Foreign currency 185 182 214 279 301 322 329 329 334 333 334 335 327 -2.5% 8.2%
Source: Bank Indonesia.

Deposit growth & breakdown

Deposit growth by types of bank Deposit growth by types of deposit
% % 50
40
40
30
30
20
20
10
10
0
0
-10 -10
Demand deposits Saving deposit Time deposit

State-owned banks Private National banks Foreign/joint banks
-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
Deposit breakdown by types of bank (as of Jan 2011) Deposit breakdown by types of deposit (as of Jan 2011)
Total: Rp 2,274tn Rural govt banks Total: Rp 2,274tn

1%
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%

Indonesia banking sector loan-to-deposit ratio

Indonesia banking sector LDR (by currency) Indonesia banking sector LDR (by types of bank)
100% 140%
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)

Individual loan & deposit breakdown

As of Dec 2010 (Rp bn, %)
Total YoY Loan mkt YoY SME/ YoY YoY YoY YoY
Company name Ticker Loans (%) share Corp. (%) Cmm'l (%) Micro (%) Consumer (%) Govt. Bond (%)
Bank Mandiri BMRI.JK 244,026 22.9 14% 93,551 13.1 87,474 28.7 7,301 35.7 55,700 31.2 78,093 -12.4
Bank Central Asia BBCA.JK 153,965 24.6 9% 56,253 17.9 61,180 27.0 - - 36,532 31.9 40,699 -4.2
Bank Rakyat Indonesia BBRI.JK 253,049 21.4 14% 46,055 18.6 77,180 5.6 77,433 41.2 52,381 25.7 13,626 -32.7
Bank Negara Indonesia BBNI.JK 136,357 12.8 8% 54,850 19.4 53,997 1.6 - - 27,510 26.5 32,473 4.6
Bank Danamon BDMN.JK 82,657 30.6 5% 10,689 12.9 19,639 19.2 15,972 13.5 36,357 45.8 6,138 -44.3
Bank Tabungan Negara BBTN.JK 51,550 26.6 3% - - 3,542 79.8 - - 48,006 23.8 7,193 -2.5
CIMB Niaga BNGA.JK 104,900 26.0 6% 32,800 21.0 37,500 22.0 - - 34,600 35.2 12,710 21.7
Bank International Indonesia BNII.JK 53,561 35.1 3% 12,281 22.8 18,975 35.1 - - 22,305 43.0 3,829 -28.3
1783601.15
Note: CIMB Niaga's govt. bond of Rp 12,710bn incl. marketable securities as company doesn't provide further breakdown
AS of Dec 2010 (Rp bn, %)
Deposit
Total YoY mkt Demand YoY Saving YoY Time YoY LDR LDR NPL
Company name Ticker Deposits (%) share Deposit (%) Deposit (%) Deposit (%) (%) (incl. Gov bond) (%)
Bank Mandiri BMRI.JK 362,212 13.4 16% 68,372 -5.9 133,585 17.4 160,254 20.4 67.4 88.9 2.4
Bank Central Asia BBCA.JK 277,531 13.2 12% 63,990 17.0 145,553 13.5 67,987 5.0 55.5 70.1 0.6
Bank Rakyat Indonesia BBRI.JK 328,556 28.4 14% 77,049 53.8 125,198 19.8 126,310 24.6 77.0 81.2 2.8
Bank Negara Indonesia BBNI.JK 194,375 3.1 8% 48,278 7.1 66,216 12.6 79,881 -5.5 70.2 86.9 4.3
Bank Danamon BDMN.JK 78,973 17.5 3% 9,796 42.8 21,268 38.4 47,909 6.5 104.7 112.4 3.0
Bank Tabungan Negara BBTN.JK 45,332 12.7 2% 5,135 -30.3 10,683 19.5 29,514 23.4 113.7 129.6 3.3
CIMB Niaga BNGA.JK 117,830 36.6 5% 27,390 37.3 23,960 23.3 66,480 41.9 89.0 99.8 2.5
Bank International Indonesia BNII.JK 59,902 26.5 3% 10,255 15.5 13,800 18.9 35,847 33.5 89.4 95.8 3.1
Source: Company data,

Key rates and system loan spread data

Key rate indicators Weighted average loan yield
% 18 % 24.0
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
Source: Datastream, Bloomberg Source: Bank Indonesia.
Weighted average deposit rate Weighted average loan-to-deposit spread

% 15.0 % 15.0
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
Sector NPL ratio Indonesia banks NPL ratio
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.
NPL breakdown by loan type (as of 4Q10)
As of 4Q10 Mandiri BRI BNI Danamon As of 4Q10 BTN

NPL % ᇞchg qoq (ppt) NPL % ᇞchg qoq (ppt) NPL % ᇞchg qoq (ppt) NPL % ᇞchg qoq (ppt) Type NPL % ᇞchg qoq (ppt)
Corporate 1.93 0.34 2.43 -2.23 2.60 -0.20 3.23 -1.51 Housing Loans 3.14 -0.94
Comercial/Medium 2.36 -0.64 6.84 -6.71 11.90 -0.40 Subsidized mortgage 3.75 -1.15
3.79 1.07
Small 2.59 -1.04 5.19 -1.37 3.30 0.80 Non-subsidized mortgage 2.64 -0.75
Micro 4.68 -2.05 1.22 -0.34 - - 2.70 -0.08 Other Housing 2.53 -0.96
Consumer 2.11 -0.44 1.40 -0.36 1.80 0.10 2.77 -0.88 Construction Loan 2.60 -0.48
Total 2.21 -0.18 2.78 -1.50 4.30 -0.10 3.03 -0.04 Non-Housing Loans 4.22 -1.61
Consumer Loan 0.81 -1.40
Commercial Loan 5.26 -1.69
Total Loans 3.26 -0.96
Source: Company data

Net credit cost for banks under our coverage (bps)
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.
Source: Company data.
Coverage ratio for banks under our coverage (%)
% 2006 2007 2008 2009 1Q10 2Q10 3Q10 4Q10 2010

Bank Mandiri 76 132 147 250 222 208 194 194 194
Bank Central Asia 217 252 408 481 366 334 341 395 395
Bank Rakyat Indonesia 155 178 178 157 149 147 160 204 204
Bank Negara Indonesia 56 72 104 121 120 123 122 122 122
Bank Danamon 100 127 106 81 89 130 117 122 122
Bank Tabungan Negara 77 54 54 51 45 45 45 52 52
Total avg. 113 136 166 190 165 165 163 182 182
Note: Total avg. is simple average of six banks’ coverage ratio.

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

Industry landscape (Bank only, as of September 2010)
Total Asset (Rp tn) Total Loans (Rp tn)
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
Source: Bank Mandiri Source: Bank Mandiri
Total Deposits (Rp tn) Yield on Assets (%, p.a.)
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
Source: Bank Mandiri Source: Bank Mandiri

%
%
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
Mandiri 39.5 BCA 2.7
Source: Bank Mandiri

BRI 40.8 BNI 3.6
Cost to Income ratio

Cost of Funds (%, p.a.)
Panin 42.2 Mandiri 3.9
Danamon 43.1 BRI 4.0
Goldman Sachs Global Investment Research

BNI 43.5 BII 4.7
CIMB Niaga 46.9 CIMB Niaga 4.8
Permata 48.1 Permata 5.0
BCA 48.9 Panin 5.1
BTN 54.8 Danamon 5.3
BII 58.1 BTN 6.4

%
-
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
BRI 1,636 BRI 9.5

No. of Branches
Mandiri 1,296 Danamon 9.2

Net Interest Margins (%)
Danamon 1,290 CIMB Niaga 6.6
BNI 1,054 BNI 5.9
BCA 898 BII 5.8
CIMB Niaga 714 BTN 5.7
BTN 702 BCA 5.5
Panin 398 Permata 5.4
BII 294 Mandiri 5.4
Permata 274 Panin 4.9

Indonesia: Banks
18
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

Summary of key accounting rule changes (a.k.a. PSAK 50/55)
Item Change Impact Note

Flat‐rate loan (e.g., Int rev recognized on NII ↑; NIM↑; C/I ratio ↓ More impact to BRI, BTN; Danamon
micro/salary loan/subsidized effective rate basis already recognized loan on effective‐
mortgage rate basis
Loan‐related fee income From interest income NII ↓; NIM ↓; Fee income ↑ All banks gets impacted

to fee income
SBI (trading account) interest From interest income NII ↓; NIM ↓; trading/MTM More impact to banks with excessive

income to trading/MTM income ↑ liquidity on hand (e.g., BCA)
income
Government guarantee From operating NII ↓; NIM ↓; Opex ↓ c. 0.2% of total deposit balance

premium expense expense to interest
expense
Loan loss recovery From provision Credit cost ↑, Operating More impact to banks with sizeable
expense (deduction revenue ↑ recovery (e.g., Mandiri, BNI, BRI)
item) to other income
FX revaluation From gain on Non‐interest income ↓; non‐op Small amount in general

spot/derivatives to income ↑
non‐op income
Income from FX transaction From non‐op income non‐op income ↓; non‐interest More impact for those active in FX
to non‐interest income income ↑ businesses
Source: Bank Indonesia, Goldman Sachs Research estimates

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.
Nevertheless, sector growth momentum remains robust

We believe robust loan growth/fee income expansion will likely continue in 2011 on the back of a promising macro outlook (GSe of
6.2% real GDP growth in 2011), increasing credit demand, and Bank Indonesia’s (BI) growth bias. Consumer loans could still likely
outgrow corporate loans, although we highlight slowdown in vehicle finance as inevitable given the high basis in 2010. We expect
22% loan growth in 2011 vs. BI’s target of 22%-24%.
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.
Sweet spot of credit cycle with sizeable loan recovery potential

Relatively low interest rates, stable FX rate/macro environment, along with the banks’ enhanced risk management, should help
banks keep credit cost low and likely recover some written-off bed debt as well in 2011. However, the sector could be off the sweet
spot earlier than expected, if a potential oil price rally leads to significant pick-up in inflation, accelerating interest rate hikes.
Raising estimates, target prices for BNI/BRI/BTN

We revise our 2011E-13E EPS for BNI/BRI/BTN by 1%-17% and 12-m Camelot-based TPs by 6%-10% mainly on the PSAK 50/55
impact and to reflect latest company guidance. Buy-rated Mandiri and BNI remain our top picks on their solid deposit franchise,
higher loan loss recovery potential, and robust capital adequacy (32% and 38% FY11 NPAT growth respectively vs. sector’s 21%).
Risks: robust loan/NIM expansion, severe asset quality deterioration.
(Vincent Chang, Justin Chen, Apr 7, 2011)
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).
What to do with the stock

Mandiri (Buy) is still our favored stock in the sector, given its continued turnaround efforts to improve productivity and risk
management, liquid balance sheet which positions it well in the current rate-hike environment. It has ample loan loss recovery
potential and robust capital position for future growth. Despite the negative impact from the reference rate change, its potential
earnings delivery capabilities remain largely intact, in our view. We raise our 2011E-12E EPS by 5%/1% to factor in lower credit costs,
and raise our 12-m Camelot-based target price to Rp7,500 (from Rp7,300).
Key Risks: Severe loan pricing competition; Asset quality deterioration.

(Vincent Chang, Justin Chen, Apr 1, 2011)
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).

The recent reference rate change for variable bonds (from SBI to SPN) and additional reserve requirement ratio (effective in Apr
2011) could negatively affect its asset yield; in response, BCA plans to further lower its savings deposit rate by 25bp to mitigate the
impact. However, its continued loan growth in consumer and commercial/SME sector should lift asset yield, in our view. Hence, we
still expect 21bp NIM expansion in 2011E, but mostly backend-loaded (i.e., 2H11). BCA’s continued investment in ATM, branches, IT
system, along with its strong brand appeal, should help sustain its funding cost advantage over peers, in our view. On the other
hand, its credit cost is likely to stay low due to its more risk adverse business culture. We raise our 2011E-13E EPS by 1%-3% to
factor in higher loan growth, and raise our 12-m Camelot-based target price to Rp 6,700 (from Rp6,600). Trading at 4.2X ‘11E BVPS,
17.1X ‘11E EPS, we think the stock appears fully valued (vs. industry avg. ‘11E P/B of 3.3X); maintain Neutral.
Risks: Robust loan/NIM expansion (upside); Severe asset quality deterioration (downside).

(Vincent Chang, Justin Chen, Mar 18, 2011)
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.

In light of its enhanced capital strength, establishment of risk management culture, and improvement in branch/IT infrastructure, we
believe there should be still plenty of “low-hanging” fruit for BNI to improve its operating performance. We maintain our 12-mo,
Camelot-based TP at Rp 4,200, implying 2.1X ‘11E BVPS and 14.5X ’11E EPS. Reiterate Buy.
Key risks
Severe asset quality deterioration; downward loan pricing driven by competition.
(Vincent Chang, Justin Chen, Mar 17, 2011)
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%.

Despite its stronger-than-expected loan growth, we maintain our Sell rating on the stock given: (1) we believe its NIM contraction in
2011 would be inevitable as BI started policy rate hike in Feb 2011; our Global ECS Research team expects a 100bp rate hike in 2011

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)

Target prices, ex-growth floors, and CAMELOT ceilings

Current GS target GS CAMELOT Price Capital asset 2-stage dividend discount model Ex-growth bond-equivalent
Bank
price price price ceiling floor pricing model assumptions valuation
12- Potential Ex-gth. Curr price Risk- CAMELOT (d) 3-year (a) (b) (c)=a*(1-b) CAMELOT CAMELOT (a)/(d) Premium/
Price month upside/ Target P/B P/B x as % of free adj. risk Cost of div. Sust. Div Long-term implied target Ex-gth. 2011E (discount)
13-Apr-11 Target downside X est. BVPS BVPS ex-gwth rate premium equity CAGR ROE payout growth P/E P/B P/B P/B to ex-gwth
Hong Kong (HKD) On 2011E BVPS
BOC Hong Kong (Holdings) 24.60 27.50 12% 27.50 17.1 144% 3.8 5.8 9.6 12.0 15.0 60 6.0 14.3 2.14 1.57 2.14 37%
Bank of East Asia 32.95 36.50 11% 36.50 22.4 147% 3.8 6.0 9.8 15.2 10.1 56 4.4 12.3 1.24 1.04 1.46 40%
Chong Hing Bank 20.25 18.50 -9% 18.50 13.0 156% 3.8 5.7 9.5 17.0 8.1 35 5.3 11.4 0.92 0.86 1.28 50%
Dah Sing Banking Group 12.48 15.20 22% 15.20 10.2 123% 3.8 6.0 9.8 11.0 9.4 30 6.6 10.6 0.99 0.96 1.11 15%
Hang Seng Bank 121.90 150.00 23% 150.00 92.5 132% 3.8 5.4 9.2 3.9 23.1 70 6.9 15.5 3.59 2.52 3.03 20%
HSBC Holdings 83.85 103.00 23% 87.67 77.1 109% 3.8 6.0 9.8 7.3 12.1 50 6.0 11.7 1.41 1.24 1.26 2%
Standard Chartered Bank 210.20 231.00 10% 231.00 190.6 110% 3.8 5.9 9.6 10.0 14.5 39 8.8 14.3 2.08 1.51 1.53 2%
Wing Hang Bank 88.80 108.00 22% 108.00 64.5 138% 3.8 6.0 9.8 15.0 13.0 50 6.5 13.8 1.80 1.33 1.67 25%
Dah Sing Financial Holdings 49.95 57.00 14% 57.00 47.4 105% 3.8 6.0 9.8 2.5 9.9 40 5.9 9.5 0.94 1.02 1.00 -2%
India (Rs) On Mar 2011E BVPS
Axis Bank 1,439 1,510 5% 1,510 486.9 296% 7.0 5.3 12.3 20 13.0 62 5.0 22.6 2.94 1.06 2.71 155%
HDFC Bank 2,372 2,470 4% 2,470 616.3 385% 7.0 4.5 11.5 24 13.0 62 5.0 30.2 3.93 1.13 3.77 234%
ICICI Bank 1,128 1,245 10% 1,245 519.4 217% 7.0 5.1 12.1 22 13.0 62 5.0 15.6 2.03 1.07 2.14 100%
IndusInd Bank 280 320 14% 320 85.0 330% 7.0 5.5 12.5 24 13.0 62 5.0 26.2 3.41 1.04 3.03 190%
Kotak Mahindra Bank 455 470 3% 470 99.0 460% 7.0 5.0 12.0 24 13.0 62 5.0 22.4 2.91 1.08 4.47 313%
Yes Bank 333 370.00 11% 370.00 110.5 302% 7.0 6.0 13.0 25 13.0 62 5.0 21.2 2.76 1.00 2.49 149%
Bank of Baroda 974 1,110 14% 1,110 492.4 198% 7.0 5.3 12.3 17 12.8 61 5.0 16.1 2.05 1.04 1.70 63%
Bank of India 487 420.00 -14% 420.00 287.0 170% 7.0 6.0 13.0 11 13.0 62 5.0 11.4 1.48 1.00 1.42 42%
Punjab National Bank 1,197 1,430 19% 1,430 668.7 179% 7.0 5.3 12.3 16 13.0 62 5.0 16.3 2.12 1.06 1.56 47%
State Bank of India 2,819 2,800 -1% 2,800 1,265.3 223% 7.0 5.3 12.3 15 13.0 62 5.0 13.7 1.78 1.06 2.04 93%
Union Bank 343 395.00 15% 395.00 214.3 160% 7.0 6.3 13.3 26 13.3 62 5.0 13.2 1.76 1.00 1.31 31%
Housing Development Finance Corpo 717 650 -9% 650 129.1 556% 7.0 5.0 12.0 14 13.0 62 5.0 29.2 3.80 1.08 5.29 389%
Infrastructure Development Finance 159 175.00 10% 175.00 78.2 204% 7.0 5.0 12.0 15 13.0 62 5.0 16.8 2.19 1.08 2.05 89%
LIC Housing Finance 226 230.00 2% 230.00 91.4 247% 7.0 5.3 12.3 22 13.0 62 5.0 16.7 2.17 1.06 2.17 105%
Shriram Transport Finance 814 810.00 -1% 0.00 229.5 355% 7.0 5.0 12.0 14 13.0 62 5.0 23.8 3.10 1.08 3.05 181%
Indonesia (IDR) On 2011E BVPS
Bank Central Asia 7,150 6,700 -6% 6,700 2,400 298% 9.5 4.5 14.0 30.0 24.0 50 12.1 20.9 5.02 1.71 4.41 158%
Bank Danamon 6,550 5,250 -20% 5,250 2,833 231% 9.5 6.0 15.5 30.0 20.0 50 10.0 13.9 2.78 1.29 2.74 113%
Bank Mandiri 6,800 7,500 10% 7,500 3,238 210% 9.5 4.5 14.0 25.0 20.0 50 10.1 16.7 3.35 1.43 2.43 70%
Bank Negara Indonesia 3,950 4,600 16% 4,600 2,582 153% 9.5 5.6 15.1 18.0 20.0 50 10.0 10.8 2.15 1.32 1.98 50%
Bank Rakyat Indonesia 6,200 6,400 3% 6,400 2,318 267% 9.5 5.3 14.8 25.0 23.0 50 11.5 17.3 3.97 1.56 3.35 115%
Bank Tabungan Negara 1,740 1,700 -2% 1,700 1,003 173% 9.5 5.3 14.8 20.0 20.0 50 10.1 12.2 2.44 1.36 2.09 54%
Korea (KRW) On 2011E BVPS
Daegu Bank 17,100 18,700 9% 18,700 15,389 111% 5.0 7.8 12.8 17.1 13.2 40 7.9 9.1 1.21 1.04 1.01 -2%
Hana Financial Group 46,550 56,000 20% 56,000 43,550 107% 5.0 7.2 12.2 15.7 10.8 40 6.5 8.7 0.94 0.89 0.87 -3%
Industrial Bank of Korea 18,350 19,100 4% 19,100 18,072 102% 5.0 7.9 12.9 15.5 12.4 40 7.4 8.4 1.04 0.96 0.87 -9%
KB Financial Group 56,700 72,600 28% 72,600 47,251 120% 5.0 7.3 12.3 49.6 11.4 40 6.8 14.3 1.62 0.93 0.99 7%
Korea Exchange Bank 9,140 11,000 20% 11,000 12,549 73% 5.0 7.2 12.2 2.5 11.8 40 7.1 7.2 0.85 0.97 0.67 -31%
Shinhan Financial Group 48,550 62,000 28% 62,000 47,071 103% 5.0 6.7 11.7 21.3 13.8 40 8.3 11.7 1.61 1.18 1.08 -8%
Woori Finance Holdings 14,100 15,900 13% 15,900 14,481 97% 5.0 8.3 13.3 16.1 10.7 40 6.4 7.4 0.79 0.80 0.71 -12%
Singapore (SGD) On 2011E BVPS
DBS Group Holdings 14.80 17.20 16% 17.20 13.3 111% 3.0 6.0 9.0 8.3 10.5 50 5.3 12.6 1.32 1.17 1.23 5%
Oversea-Chinese Banking Corp. 9.64 10.00 4% 10.00 7.9 123% 3.0 6.0 9.0 9.9 12.5 45 6.9 14.4 1.80 1.39 1.60 15%
United Overseas Bank 19.60 20.40 4% 20.40 17.9 110% 3.0 6.0 9.0 10.4 13.0 45 7.2 14.9 1.93 1.44 1.48 2%
Taiwan (TWD) On 2011E BVPS
SinoPac Holdings 13.80 13.00 -6% 8.73 8.4 164% 3.0 8.1 11.1 11.0 7.5 80 1.5 9.7 0.73 0.68 1.06 57%
Chinatrust Financial Holdings 24.00 29.00 21% 23.96 18.7 128% 3.0 6.8 9.8 15.0 13.5 80 2.7 13.4 1.81 1.38 1.69 22%
First Financial Holdings 24.60 26.00 6% 15.42 13.3 185% 3.0 6.8 9.8 12.0 8.0 80 1.6 11.6 0.93 0.82 1.39 69%
Fubon Financial Holdings 39.35 46.00 17% 24.26 24.2 163% 3.0 6.8 9.8 15.0 9.5 80 1.9 12.5 1.19 0.97 1.47 51%
Yuanta FHC 19.80 26.00 31% 12.36 11.8 168% 3.0 9.5 12.5 12.0 10.0 80 2.0 9.0 0.90 0.80 1.28 59%
Mega Financial Holdings 22.95 21.00 -8% 17.71 17.3 132% 3.0 7.4 10.4 10.0 10.0 80 2.0 10.7 1.07 0.96 1.24 30%
Cathay Financial Holding Company 46.65 49.00 5% 24.10 21.9 213% 3.0 6.8 9.8 15.0 10.0 80 2.0 12.6 1.26 1.03 2.02 97%
Shin Kong Financial Holdings 12.25 11.50 -6% 8.19 7.1 172% 3.0 8.8 11.8 10.0 7.5 80 1.5 9.0 0.67 0.64 1.02 60%
Chang Hwa Commercial Bank 23.65 16.00 -32% 9.48 9.5 249% 3.0 7.4 10.4 10.0 7.0 80 1.4 10.2 0.72 0.67 1.59 137%
Taishin Financial Holdings 16.45 17.00 3% 7.72 10.9 151% 3.0 7.8 10.8 13.0 9.0 80 1.8 10.7 0.96 0.84 1.16 39%
Current price below ex-growth value at floor; we see this as an attractive buying opportunity for value-focused investors.
Source: Datastream, Goldman Sachs Research estimates.

Dupont analysis – Breakdown of ROA as a percentage of average assets

Assets/ equity ROE/ROA DuPont analysis (as % of average assets) Profitability ratios (%)
Net int Non-int Oper Oper Loan Pretax Net Cost / Non-II / Loans /
ROE (X) ROA PPOP Tax
inc inc rev exp prov. profits profits Inc op.rev assets
Indonesia (FY 2010A) 23.6 9.7 2.5 6.6 2.1 8.7 4.2 4.4 1.2 3.3 0.8 2.5 48.7 24.3 60.2
Bank Central Asia 27.4 9.8 2.79 4.26 2.51 6.77 3.15 3.62 0.27 3.51 0.72 2.79 46.5 37.0 47.4
Bank Danamon 16.8 6.3 2.66 9.27 3.92 13.19 6.98 6.21 1.94 3.69 0.94 2.66 52.9 29.7 68.1
Bank Mandiri 22.3 10.2 2.18 4.91 2.03 6.93 2.92 4.01 0.75 3.31 1.09 2.18 42.2 29.2 52.2
Bank Rakyat Indonesia 35.9 11.3 3.18 9.12 1.26 10.38 4.47 5.91 1.78 4.13 0.95 3.18 43.0 12.2 59.1
Bank Tabungan Negara 15.4 10.7 1.44 5.24 0.79 6.04 3.54 2.49 1.14 1.97 0.53 1.44 58.7 13.1 74.1
Indonesia (FY 2011E) 21.3 8.9 2.4 6.2 2.0 8.2 4.1 4.1 1.1 3.3 0.7 2.4 49.6 23.5 62.5
Bank Danamon 16.9 6.6 2.56 8.98 3.62 12.60 6.52 6.08 1.90 3.51 0.88 2.56 51.8 28.7 69.3
Bank Mandiri 21.5 8.6 2.50 5.07 1.82 6.88 3.19 3.69 0.66 3.31 0.74 2.50 46.3 26.4 54.9
Bank Negara Indonesia 16.1 7.5 2.16 5.23 2.40 7.64 4.04 3.59 1.46 3.59 0.54 2.16 52.9 31.5 57.0
Indonesia (FY 2012E) 21.7 8.8 2.5 6.4 1.9 8.3 4.0 4.3 1.1 3.4 0.7 2.5 48.0 22.4 65.6
Bank Danamon 18.1 6.8 2.67 9.17 3.37 12.54 6.39 6.15 1.85 3.67 0.92 2.67 51.0 26.9 71.1
Bank Mandiri 20.1 8.1 2.49 5.23 1.82 7.05 3.22 3.83 0.67 3.19 0.64 2.49 45.7 25.8 59.1
Bank Negara Indonesia 17.6 7.4 2.39 5.48 2.41 7.89 3.98 3.91 1.34 3.91 0.60 2.39 50.4 30.5 59.9
Source: Company data, Goldman Sachs Research estimates.

EPS growth drivers

Key earnings drivers (% growth yoy) Memo (%)
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

12-month forward-looking valuation charts

Mandiri 12m forward P/B (2004-ytd) Mandiri 12m forward P/E (2004-ytd)
(X)
12-mo
ROE
forward 18
(X) (%)
3.0 ROE (RHS) 30
Mandiri P/B (LHS)
16
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
3.5 Average, 12.0

30 12
Average = 2.9x
3.0
25
10
2.5 -1SD
-1 SD
20
2.0
8
15
1.5
6
1.0 10
0.5 5 4

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
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

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
1.0 -1SD 14 AVG:12.6

10
10
0.5
5
6
0.33
-1SD
- 0 2
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


Indonesia Banks one page summary

Valuation Metrics Key earnings drivers (% Growth YoY) CAMEL Ratios (%)
Div. Non- Prov./ Non-int
12-month Price Performance Year P/B Op. Op. Loan Equity/ NPL LLR/ Cost/ Loans/
Indonesia Banks EPS P/E (X) BVPS ROE Yield Deps. Loans NII int PPOP NPAT EPS Loan Inc./ NIM ROA
(X) Rev. Exps. Prov. Assets ratio NPL Inc. Deps.
(%) Inc. (bps) Op.Rev
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
Coverage group(s) of stocks by primary analyst(s)

Compendium report: please see disclosures at http://www.gs.com/research/hedge.html. Disclosures applicable to the companies included in this compendium can be found in the latest relevant
published research.
Company-specific regulatory disclosures

published research.

Distribution of ratings/investment banking relationships

Goldman Sachs Investment Research global coverage universe
Rating Distribution Investment Banking Relationships

Buy Hold Sell Buy Hold Sell
Global 32% 53% 15% 49% 41% 40%
As of April 1, 2011, Goldman Sachs Global Investment Research had investment ratings on 3,191 equity securities. Goldman Sachs assigns stocks as Buys and Sells on various regional Investment
Lists; stocks not so assigned are deemed Neutral. Such assignments equate to Buy, Hold and Sell for the purposes of the above disclosure required by NASD/NYSE rules. See 'Ratings, Coverage
groups and views and related definitions' below.
Price target and rating history chart(s)

published research.
Regulatory disclosures
Disclosures required by United States laws and regulations

See company-specific regulatory disclosures above for any of the following disclosures required as to companies referred to in this report: manager or co-manager in a pending transaction; 1% or
other ownership; compensation for certain services; types of client relationships; managed/co-managed public offerings in prior periods; directorships; for equity securities, market making and/or
specialist role. Goldman Sachs usually makes a market in fixed income securities of issuers discussed in this report and usually deals as a principal in these securities.
The following are additional required disclosures: Ownership and material conflicts of interest: Goldman Sachs policy prohibits its analysts, professionals reporting to analysts and members of their
households from owning securities of any company in the analyst's area of coverage. Analyst compensation: Analysts are paid in part based on the profitability of Goldman Sachs, which includes
investment banking revenues. Analyst as officer or director: Goldman Sachs policy prohibits its analysts, persons reporting to analysts or members of their households from serving as an officer,
director, advisory board member or employee of any company in the analyst's area of coverage. Non-U.S. Analysts: Non-U.S. analysts may not be associated persons of Goldman Sachs & Co. and
therefore may not be subject to NASD Rule 2711/NYSE Rules 472 restrictions on communications with subject company, public appearances and trading securities held by the analysts.
Distribution of ratings: See the distribution of ratings disclosure above. Price chart: See the price chart, with changes of ratings and price targets in prior periods, above, or, if electronic format or if
with respect to multiple companies which are the subject of this report, on the Goldman Sachs website at http://www.gs.com/research/hedge.html.
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.

Ratings, coverage groups and views and related definitions

Buy (B), Neutral (N), Sell (S) -Analysts recommend stocks as Buys or Sells for inclusion on various regional Investment Lists. Being assigned a Buy or Sell on an Investment List is determined by a
stock's return potential relative to its coverage group as described below. Any stock not assigned as a Buy or a Sell on an Investment List is deemed Neutral. Each regional Investment Review
Committee manages various regional Investment Lists to a global guideline of 25%-35% of stocks as Buy and 10%-15% of stocks as Sell; however, the distribution of Buys and Sells in any particular
coverage group may vary as determined by the regional Investment Review Committee. Regional Conviction Buy and Sell lists represent investment recommendations focused on either the size of the
potential return or the likelihood of the realization of the return.
Return potential represents the price differential between the current share price and the price target expected during the time horizon associated with the price target. Price targets are required for
all covered stocks. The return potential, price target and associated time horizon are stated in each report adding or reiterating an Investment List membership.
Coverage groups and views: A list of all stocks in each coverage group is available by primary analyst, stock and coverage group at http://www.gs.com/research/hedge.html. The analyst assigns one
of the following coverage views which represents the analyst's investment outlook on the coverage group relative to the group's historical fundamentals and/or valuation. Attractive (A). The
investment outlook over the following 12 months is favorable relative to the coverage group's historical fundamentals and/or valuation. Neutral (N). The investment outlook over the following 12
months is neutral relative to the coverage group's historical fundamentals and/or valuation. Cautious (C). The investment outlook over the following 12 months is unfavorable relative to the coverage
group's historical fundamentals and/or valuation.
Not Rated (NR). The investment rating and target price have been removed pursuant to Goldman Sachs policy when Goldman Sachs is acting in an advisory capacity in a merger or strategic
transaction involving this company and in certain other circumstances. Rating Suspended (RS). Goldman Sachs Research has suspended the investment rating and price target for this stock, because
there is not a sufficient fundamental basis for determining, or there are legal, regulatory or policy constraints around publishing, an investment rating or target. The previous investment rating and
price target, if any, are no longer in effect for this stock and should not be relied upon. Coverage Suspended (CS). Goldman Sachs has suspended coverage of this company. Not Covered (NC).
Goldman Sachs does not cover this company. Not Available or Not Applicable (NA). The information is not available for display or is not applicable. Not Meaningful (NM). The information is not
meaningful and is therefore excluded.
Global product; distributing entities

The Global Investment Research Division of Goldman Sachs produces and distributes research products for clients of Goldman Sachs, and pursuant to certain contractual arrangements, on a global
basis. Analysts based in Goldman Sachs offices around the world produce equity research on industries and companies, and research on macroeconomics, currencies, commodities and portfolio
strategy. This research is disseminated in Australia by Goldman Sachs & Partners Australia Pty Ltd (ABN 21 006 797 897) on behalf of Goldman Sachs; in Canada by Goldman Sachs & Co. regarding
Canadian equities and by Goldman Sachs & Co. (all other research); in Hong Kong by Goldman Sachs (Asia) L.L.C.; in India by Goldman Sachs (India) Securities Private Ltd.; in Japan by Goldman
Sachs Japan Co., Ltd.; in the Republic of Korea by Goldman Sachs (Asia) L.L.C., Seoul Branch; in New Zealand by Goldman Sachs & Partners New Zealand Limited on behalf of Goldman Sachs; in
Russia by OOO Goldman Sachs; in Singapore by Goldman Sachs (Singapore) Pte. (Company Number: 198602165W); and in the United States of America by Goldman Sachs & Co. Goldman Sachs
International has approved this research in connection with its distribution in the United Kingdom and European Union.
European Union: Goldman Sachs International, authorized and regulated by the Financial Services Authority, has approved this research in connection with its distribution in the European Union and
United Kingdom; Goldman Sachs & Co. oHG, regulated by the Bundesanstalt für Finanzdienstleistungsaufsicht, may also distribute research in Germany.
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.

53720717

Uploaded by

Document Information

Original Description:

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

53720717

Uploaded by

Copyright:

Available Formats

April 19, 2011

Indonesia Financials Fact Sheet

Secular loan growth continues; Near term NIM pressure likely;

The Goldman Sachs Group, Inc. Global Investment Research

Asia financials valuation summary 3

Goldman Sachs Global Investment Research 2

Source: Datastream. Goldman Sachs Research estimates.

Asia financials valuation summary

Goldman Sachs Global Investment Research 3

Recent share price performance

Goldman Sachs Global Investment Research 4

Key Macro indicators

10.0 6.89 4.36 40

Source: Datastream Source: Datastream

Jakarta Composite Index Indonesia Rupiah exchange rate

Index 2,000 USD/IDR

Source: Datastream Source: Datastream

Goldman Sachs Global Investment Research 5

Key loan data

- Agriculture 38 46 57 68 77 83 87 89 89 89 91 93 92 -0.9% 42.8%

Source: Bank Indonesia.

Goldman Sachs Global Investment Research 6

Loan growth breakdown

Source: Bank Indonesia. Source: Bank Indonesia.

Goldman Sachs Global Investment Research 7

Breakdown of private deposit outstanding

Source: Bank Indonesia.

Goldman Sachs Global Investment Research 8

Deposit growth & breakdown

Demand deposits Saving deposit Time deposit

Total: Rp 2,274tn Rural govt banks Total: Rp 2,274tn

Source: Bank Indonesia. Source: Bank Indonesia.

Goldman Sachs Global Investment Research 9

Indonesia banking sector loan-to-deposit ratio

Source: Bank Indonesia. Source: Bank Indonesia.

Goldman Sachs Global Investment Research 10

Individual loan & deposit breakdown

Source: Company data,

Goldman Sachs Global Investment Research 11

Key rates and system loan spread data

Source: Datastream, Bloomberg Source: Bank Indonesia.

Weighted average deposit rate Weighted average loan-to-deposit spread

Source: Bank Indonesia. Source: Bank Indonesia.

Goldman Sachs Global Investment Research 12

Goldman Sachs Global Investment Research 13

Sector NPL ratio Indonesia banks NPL ratio

NPL breakdown by loan type (as of 4Q10)

As of 4Q10 Mandiri BRI BNI Danamon As of 4Q10 BTN

Source: Company data

Goldman Sachs Global Investment Research 14

Net credit cost for banks under our coverage (bps)

Source: Company data.

Coverage ratio for banks under our coverage (%)

% 2006 2007 2008 2009 1Q10 2Q10 3Q10 4Q10 2010

Source: Company data.

Goldman Sachs Global Investment Research 15

Goldman Sachs Global Investment Research 16

Industry landscape (Bank only, as of September 2010)

Total Asset (Rp tn) Total Loans (Rp tn)

Source: Bank Mandiri Source: Bank Mandiri

Total Deposits (Rp tn) Yield on Assets (%, p.a.)

Source: Bank Mandiri Source: Bank Mandiri