Interest Income Growth: Expectancy of 2019
In 3Q18, BMRI posted the interest income of IDR20.7 trillion, surging by 2.7% y-y. The figure was below our prior estimate of IDR21.1 trillion. Since 3Q17, BMRI is still reigning in the flat interest income trend due to not-yet-recovering loan yield. We project that BMRI is likely to post the double-digit interest income along with the discontinued trend of decline in loan yield.
Narrowed Acceleration in Profit Growth
The net interest income (NII) amounted to IDR13.9 trillion or growing 5.7% y-y. It is possible to grow higher but still lower than is the interest income growth. BMRI still faces headwinds of rocketing interest expenses amid LDR ratio, hardly moving below 90%. On the bottom line, in 2019 BMRI is likely to find difficulties in outstripping its growth in 2018. Its performance in 2018 inevitably correlates with sliding provision expenses hardly re-occurs in 2019.
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