Maybank; Buy; RM9.96
Price Target: RM11.80; MAY MK

Bank Internasional Indonesia (BII)’s 3Q13/9M13 net profit of Rp419bn/Rp1.1trn was within our expectation. 9M13 net profit was 74% of our full year FY13F earnings. NIM remained flat at 5.37% (2Q13: 5.34%) but declined by 51bps y-o-y. Provisions declined 33% y-o-y driven by recoveries and better portfolio management. Cost to income ratio inched up to 67% (from 65% a year ago) due to continuous IT investments and branch expansion.

Loans grew 8% q-o-q and 21% y-o-y mainly led by business banking and SME. Deposits grew 6% q-o-q and 21% y-o-y driven by savings deposits and current accounts. Loan-to-deposit ratio was stable at 93% (2Q13: 95%). Gross NPL ratio inched up to 1.74% in 3Q13 from 1.43% in 2Q13, but improved from 2.08% a year ago. Asset quality at WOM continued to show improvement. CAR remained strong at 13.86% vs 12.44% a year ago.

We maintain our BUY rating and RM11.80 TP on MAY. MAY is expected to release its 3Q13 results on 21 Nov.

Source: HwangDBS Research - 29 Oct 2013