Bank Rakyat Indonesia's NPL to move closer to 2% in January

It's on a declining trend.

According to Maybank Kim Eng, BRI indicated a pick up in YoY net interest income (NII) growth for FY12 compared to the flat 9M12 result. The drivers in 4Q12 were higher QoQ micro loan growth and rising salary-based loans. Its NII estimate currently stood at IDR34.8t (+1.0% YoY). 

Here's more from Maybank Kim Eng:

Non-Performing Loans is expected to move closer to 2%, down from 2.3% by 9M12. This declining rate might translate to lower provisioning expense in 4Q12. 

Combined with net interest margin (NIM) that is estimated to remain stable at 8.4% by YE12, we expect a positive bias on the actual net profit figure from our IDR16.9t FY12 forecast.

This could create trading opportunity for the stock. We maintain our BUY recommendation for BRI with TP at IDR8,500/share (11.3x 2013F PER; 2.6x 2013F PBV).