We noted the improvement in efficiency in 3Q14 because of BDMN’s new strategy that targeted to reduce costs and to optimize network channel. However, in terms of profitability and growth, BDMN posted weak result in 3Q14 with the net profit reported at Rp617 bn, relatively flat at 0.5% qoq but down 39.6% yoy (3Q13: Rp1.0 tn). This was mainly due to slower loan growth, which was down 1.5% qoq and only up 7.4% yoy, exacerbated by deterioration in asset quality with gross NPL rise 30bps qoq. We maintained our HOLD rating with target price of Rp3,750.
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