Bank Negara Indonesia: 1H11 results represented 50.5% of our FY11 forecast and 51.6% of consensus (BBNI, Rp4,075, Buy, Rp4,500) - Mandiri

􀂄 BBNI reported net profit of Rp2.7 tn (+41.1% yoy) in 1H11, representing 50.5% of our FY11 forecast and 51.6% of consensus estimates.
􀂄 The bank’s performance improved significantly in 2Q11, partly driven by strong loan growth of 21% yoy during the semester. Consumer and corporate loans posted a strong growth of 34% yoy and 25% yoy, respectively, representing 18% and 37% of total loans at end Jun11.
􀂄 During the analyst meeting yesterday, the management maintained its loan growth target of between 17-20% yoy this year, indicating that a slower loan growth is likely in 2H11. The bank prefers to have proper loan acquisition process to aggressive loan growth in order to minimize the loan quality deterioration in the future. At end Jun11, the bank has written off Rp1.5 tn of bad loans, lower than previous year’s of Rp2.2tn. Should this trend continue in 2H11, we might expect lower impairment expenses allocated for FY11.
􀂄 At current price, BNI is traded at 2012F P/BV of 1.8x and PER of 12.2x We maintained our buy rating on the counter.