Double-digit credit growth implies that Bank Negara Indonesia (BNI) scores better than the national average that is estimated to have failed to reach a double-digit figure (possibly only touching a growth rate of 8.2 percent) last year. Corporate credit contributed 78 percent to total credit disbursement of BNI, while consumer credit accounted for 16 percent. Meanwhile, credit quality improved reflected by a declining non performing loan (NPL) ratio from 3.0 percent at the end of 2016 to 2.3 percent at the end of 2017.

The bank's net interest income rose 6.5 percent (y/y) to IDR 31.94 trillion (approx. USD $2.4 billion), while its fee based income climbed 13.9 percent to IDR 8.59 trillion. Achmad Baiquni, President Director of BNI, said fee based income particularly originates from trade finance and remittance transactions. He added that BNI's fee based income is much better than the national average that is estimated to have contracted by 0.5 percent.

BNI's assets expanded 17.6 percent (y/y) to IDR 709.33 trillion (approx. USD $52.9 billion) in full-year 2017, the first time the bank touched beyond the IDR 700 trillion level. The rise in assets was supported by growing third party funds, up 18.5 percent (y/y) to IDR 516.1 trillion.

Despite improving corporate earnings, shares of BNI are down 4.04 percent to IDR 9,500 a piece so far in 2018. Investors may have been keen on profit taking after the bank's sharp share price rise in December 2017 as well as the fact that BNI's net profit growth and credit growth both slowed in 2017. In 2016 its net profit growth was recorded at 25.1 percent (y/y) versus 20.1 percent in 2017, while its credit growth reached 20.6 percent (y/y) versus 12.2 percent in 2017.

Baiquni targets a 15-17 percent (y/y) increase in credit growth in 2018, supported by corporate and consumer credit. This implies that he sees an improving performance for BNI compared to 2017. This is due to the improving economic conditions of Indonesia.

In 2018 BNI also plans to acquire another bank in order to strengthen its assets. However, few further information has been given about this plan. Meanwhile, the bank is also considering to conduct a stock split in order to make its shares more competitive and more liquid. This plan will be discussed at the Q1-2018 shareholders meeting. Recently, two rivals (Bank Mandiri and Bank Rakyat Indonesia) also conducted a stock split.

Stock Quote Bank Negara Indonesia - BBNI:

Bahas