by Samuel Sekuritas
Net income of BBCA at 1Q11 reached Rp2.0 tr below our estimate and market consensus. The low net income mainly due to the implementation of new accounting standard.
Net interest income increased significantly 40.9% and non-interest income dropped 19.5% because shifted SBI held in trading to BI term deposit. According to PSAK 50&55, income from SBI held in trading is booked as non-interest income, while income from BI term deposit is booked as interest income.
BBCA booked high provision for the reason that since 2011 BBCA booked provision for undisbursment loan (+/-1% from undisbursment-committed loan). This regulation is effective at mid of this year but BBCA has implemented it since the beginning of this year.
On Assumption that BBCA does not book provision for disbursement loan on 3M11, we calculate net income will reach +/-Rp2.6 tr (vs actual result Rp2.0 tr). As information, others bank have not implemented this new accounting standard.
We revise our forecast with incorporating the additional provision from undisbursment loan. We also change our net interest income and non-interest income because the shifted of SBI held in trading to BI term deposit.
Action and recommmendation:
We downgrade our target because our new income is lower than previously. However, the decreasing is not significant because the additional provision will increase our adjustment equity based on Gordon Growth Model. Our new target price is Rp6,950 (from Rp7,000) or with downside potential 8.5%. Downgrade to Hold