Term Deposit (TD) rates of banks in coverage are relatively well maintained.

Loans and third-party funds growth in Indonesia have been on an upward trend since 2023.

Non-Performing Loans (NPL) fell 172 bps ytd to 2.23% in June. This achievement occurred despite several global central banks implementing tight monetary policies.

Rupiah depreciation can be a risk for banking. However, along with the optimism of the Fed Funds Rate cut in September, the rupiah has appreciated again so that the rupiah only depreciated less than 1% to IDR15,520/USD on September 2.

The 6M24 performance of banks in our coverage mostly reached 50% of our FY24 estimate.

BI Rate has the potential to fall in The BI Rate has the potential to decrease in the fourth quarter of 2024.

Indonesia’s Trade Balance Surplus Maintained in the Last Three Years From 2024 until July 2024, Indonesia’s Trade Balance (BOP) has always posted a surplus. In July 2024, the BOP posted a surplus of US$0.47 billion.

Rupiah Exchange Rate Appreciation Has Potential to Continue Until End of 2024.

Indonesian Banking Net Interest Margin Remains High Amid High Interest Rates.

Return on Equity (ROE) growth in the last 5 years remains high.

Banking capital adequacy in Indonesia.

With the various catalysts above, as well as the performance of each issuer in the banking sector, we make our top picks BMRI with a potential fair value of IDR 8,171 > BBCA with a potential fair value of IDR 10,950 > BBRI with a potential fair value of IDR 6,165 > BBNI with a potential fair value of IDR 6,800 > BRIS with a potential fair value of IDR 2,970 > BBTN with a potential fair value of IDR 1,807.

By PHINTRACO SEKURITAS | Research
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