BBRI

Economic condition of 2014

Indonesia seems stable in its economic growth in 2014, according to the expert it will be at range of 5.8- 6.2. It is slower than economic growth in 2013 which was forecasted at 5.7 % up. Indonesia has good competitive advantage in its economic, this is stable and this is supported by more than 50 % domestic consumption.

As long as people have strong ability in buying goods and the inflation rate is better, the condition will be better. BI rate is at 7.5 %, it is predicted that it will be higher at 2014. The deficit of current account which is contributed by oil and gas sector as main contributor make the central bank keep BI rate at the point.

The current account deficit will be still high in 2014. The lack of government policy in oil and gas sector increases its business risk and the similar problem is also occurred in biodiesel conversion policy in a mixture of diesel. It is difficult to reduce trade deficit in diesel imports. The crisis at Ukraine will trigger higher oil price and finally will increase inflation rate. Higher its rate will force central bank keep Bi rate still high.

76 % of imports are raw material items which means our consumption is not matching with domestic raw material either its number or availability.

I think if industry produce goods which are supported with more local raw material the trade deficit will be able to be reduced.

Central Bank has changed its required reserve from 5 % in to 8 %. With higher reserve, the banks are expected safer. Based on data 2013 credit growth is at 22.2 % yoy in October 2013, this is slower than its growth with 23.1 % on September 2013. This regulation increases its barrier to entry for new comers who have to have more capital to establish Bank.

Bank Rakyat Indonesia

The company still concerns in its core business, the credit retail segment. The micro segment is at 30.7 % of total loan although this is smaller than the retail banking. Since they have launched TerasBRI, its network and product development has been better. TerasBRI as the part of its micro strategic has increased both micro Loan and micro deposit significantly in 2012. Micro segment is designed for personal customer with competitive product such as Kredit Usaha Rakyat and Kupedes as the lending product and simpedes as funding product.

The company expanded its micro infrastructure with 5000 BRI units, 1,778 TerasBRI and 350 mobile TerasBRI.

In 2012 the loan of the company is at IDR 362 trillion. It increases 22.9 % higher than loan in 2011.  Based its loan composition in 2012, the biggest loan of its loan is retail segment with 42 % of total loan. I took rediction the loan will increase 19 % higher with increase of interest income at 20 % in 2014.

In 2008-2012 The company have good loan to deposit ratio, good capital adequacy ratio and low Non performing loan. The asset has average growth at 22.5 % in 2008-2012. The other good news is its average growth of fund from third party in 2008-2012 is at 27.45 %.

As the economic growth in 2014 is predicted in lower rate because of the election schedule in the year, I forecast the placement with bank Indonesia will be higher than 2013 at 20 % increase.

I took prediction that EPS will increase to 1.026, 1,357, 1,543 with consecutive growth 2014-2016 at 20%,25 %, 20%. In 2015 the loan assessment will at 25 % as the optimistic condition of new government.

As long as government could decrease deficit  in current account  inflation rate and Bi rate will be stable.      

If you are interested to my forecasting of BBRI you could send sms 081217596612.