KEY INVESTMENT HIGHLIGHTS

• 6MFY24's Core NP of RM266m was Within/Within our/street forecasts: 44%/45% of full-year forecasts
• Management's tone: Optimistic
• Core themes: (a) Gear-Up programme boost, (b) Branch revamp, (c) Loan growth targets maintained
• Forecasts unchanged
• Maintain BUY | Revised TP of RM3.06 | based on a revised FY25F P/BV of 0.87x (previously 0.82x)

Verdict: Excellent dividend yields, and a whole host of rerating drivers.

Yays

1. Excellent dividend yields.
2. Core beneficiary of the government's Gear-uP programme and civil servants' salary hike.
3. Beneficiary of non-Klang Valley development initiatives, given its large exposure to non-central regions.

Nays

1. CIR is still on the high side.

OKs

1. Loan growth is lagging - but should pick up in 2HFY24.
2. Revamp of brick-and-mortar branches could be beneficial to NOII.

Results in a nutshell:

▲ 6MFY24's Core net profit (NP) of RM266m up by +5%yoy. The growth was driven by better NII and lower loan provisions offsetting weaker NOII and high-cost inflation. Although 1HFY24's earnings came in on the weaker side, we maintain our forecasts as BIMB is subject to seasonal effects, and usually reports stronger earnings in 2H.

► 2QFY24's Core NP of RM137m up by +6%qoq. There was a stronger NII and loan provisioning result, offsetting higher NOII and OPEX.

▼ Gross loans grew by +0.5%qoq, coming up to +0.7%YTD. Regardless, management believes it can achieve its FY24 loan growth target of 7-8%.

▲ Deposits grew by +3.3%qoq, coming up to +3.5%YTD.

▲ GIL moved by -3bps to 0.92%, LLC currently at 125%.

Source: MIDF Research - 27 Aug 2024