BBNI: Mitigating Bad Debt Risk - An Attractive Valuation
30 Jan 2020
Mitigating Bad Debt Risk - An Attractive Valuation
BBNI has allocated higher than expected provision cost in 4Q19 by 2?fold which was aimed to mitigate deteriorating NPL risk in 2020. We forecast that the company will maintain its NPL at the level of 2.3% in 2020F due to the PSAK 71 implementation in January 2020. Currently, BBNI share price traded slightly below its average 5 years forward PBV - 1 stdev of 1.04x which translated into an attractive valuation. Hence, we kept BUY rating on the counter with 27% upside potential.
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