Indonesia Banks - Unaudited Profits In Line But BBRI Deposit Surprise - Citigroup

 2010 Provisional Results — BMRI, BBCA, BBRI and BBTN have posted their full year unaudited (Bank only) financial statements on Bank Indonesia's website. The key takeaways are 1) results are mostly in line with Consensus (+/- 2%), and 2)BBRI deposits shot up 28% in Q4, bringing down its LDR from 89% (Sep 2010) to 73%. BBNI is yet to post its results while BJBR's (not covered by Citi) 2010 provisional profit is 16% below Consensus. We maintain our Buy ratings on BMRI and BBCA, banks with positive sensitivity to rising interest rates.

 Changes possible in Audited Results — Final results are due in March, along with analyst briefings. Banks have moved to new accounting standard PKAS 50-55 from 2010 and auditors may recommend changes. Upside surprise could comein the form of Credit Cost for BBCA, BMRI and BBTN. The 2009 numbers available are on the previous format so y-o-y comparisons may include distortions.

 Lower NII for BMRI but higher Trading Income and Cash Recoveries — Net profit is marginally above Consensus, with Q4 profits up 5%. NII is down 3% (q-oq)with 6% loan growth and 12% deposit growth, indicating NIM pressure. Higher trading income and cash recoveries have supported bottomline.

 BBCA NII up in Q4 — In contrast to BMRI, NII is up 10% (stable NIMs in our opinion) with lower trading income and cash recoveries. Q4 had strong loan growth (11%) and modest deposit growth (6%).

 BBRI reports 28% Deposit Growth in Q4 — LDR is down from 89% to 73%. NII growth was modest at 2% despite demand deposits rising 81% (getting almost 90% of Demand Deposits raised by State Owned Entities.

 BBTN loan growth lagging Industry at 19% — BBTN had flat Q4 earning, as 5% NII growth was offset by higher operating expenses.