Bank BJB's profit up 19% to US$123m in FY16

Thanks to a 110bps increase in NIM.

According to Maybank Kim Eng, BJB’s conventional and Sharia bank have each released their unaudited FY16 results. The parent company’s profit grew 19% YoY to IDR1.65t (US$123m), driven by a 110bps increase in NIM to 7.4% as the bank cut its exposure to high-cost deposits.

Here's more from Maybank Kim Eng:

The strong profit was accompanied by 130bps lower NPLs to 1.6%. However, by YE16 this significant improvement in loan quality was outshined by soaring NPF at the subsidiary level.

We estimate NPFs will stay at ~10%, assuming another IDR150b NPF settled in 4Q16, which caused nearly 9x higher provision YoY and resulted in IDR415b (USD31m) net loss in BJB sharia.

Overall, the FY16 consolidated profit, which will be announced in the 1st week of March, is likely to be in line with our IDR1.6t forecast, with total NPLs of 2.2%. BJB is likely to keep nominal dividend at IDR85/sh, which will be distributed in April.