1Q18 Growth Spurred by Net Fee Income
BBNI booked the interest income of IDR12.7 trillion (+9.6 y-y) and net interest income of IDR8.5 trillion (+9.5%). Its net profit spiked 13.0% from IDR3.2 trillion in 1Q17 into IDR3.6 trillion in 1Q18. The double-digit growth in net profit was spurred by the upswing of 15.8% from IDR1.6 trillion into IDR1.8 trillion in net fee income.

Further Margin Pressure
BBNI posted the 1Q18 net interest margin of 5.5% relatively stable since 3Q17. In 2018, we project that its net interest margin is likely contracted to 5.0% attributable to 1) the slower credit growth noting low-risk tolerance; 2) the trend of cost of deposit slightly whittling away from 3.3% in 2Q15 into 3.0% in 1Q18.

The 1Q18 credit distribution amounted to IDR439.5 trillion surging by 10.8% y-y, but whittling away by 0.4% q-q. the quarter-based underperformance was ignited by the decline of 1.3% in credit distribution posted by the corporate and small to medium-sized business (SME) segments. Of note, the corporate and SME segments contributed 82.2% to the overall credit distribution by BBNI. In light of this trend, we estimate that BBNI’s 2018 credit growth likely moderate from 12.2% into 10.8%.


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