3 interesting trends driving Indonesian banks' 11.3% profit increase in 2Q13

BCA was the strong outperformer.

According to Maybank Kim Eng, Indonesia banks concluded 2Q13 results with total net profit up 11.3% YoY (2.1% QoQ).

Maybank Kim Eng's identified these interesting trends driving 2Q13 performance:

1) In general, loans grew 24.2% YoY (8.4% QoQ), driven by acceleration in each bank’s niche lending segment;

2) Banks started to experience NIM pressure, which was caused by falling credit yields due to tighter competition;

3) We saw an early sign of provision increasing, although NPLs continue to slow to an average of -15bps QoQ.

Overall, BCA was a strong outperformer, with 14.5% YoY (18.6% QoQ) profit growth.

BNI and BRI earnings exceeded our expectation as loans surged in 2Q13.

Danamon was the underperformer with net profit sinking -11.2% YoY (2.5% QoQ), weighed down by weak automotive financing, which caused NIMs to retreat -40bps QoQ.