Supported By Strong Fundamentals, Bank Mandiri (BMRI) Shares Print All Time High

JAKARTA - The share price of state-owned banks that are members of the Association of State-Owned Banks continues to soar. Today, Thursday 27 July, it was Bank Mandiri (BMRI)'s turn to set a new record after touching IDR 5,700 per share on the Indonesia Stock Exchange. In fact, since the stock split with a ratio of 1:2 in April 2023, BMRI shares have recorded an increase of around 10 percent.

Head of Investment of PT Reswara Gian Investa, Kiswoyo Adi Joe said the BMRI's share price which touched the all-time high level was triggered by the performance of the state-owned bank which exceeded investor expectations. In addition, investors are also optimistic that shares in the banking sector, especially Bank Mandiri, still have good prospects until the end of 2023.

"I estimate that the shares in the banking sector will continue to increase. Especially BMRI's shares still have the potential to increase to Rp. 6,300 per share until the end of 2023, growing by around 26 percent (ytd)," said Kiswoyo.

According to Kiswoyo, this projection is mainly supported by the good fundamentals of Bank Mandiri. He estimates, in the first half of this year, Mandiri was able to record double-digit credit growth on an annual basis. The credit growth is even higher than the credit growth in the national banking industry which is below 10 percent.

If detailed, Bank Mandiri's credit distribution is mostly dominated by the wholesale banking segment, with growth predicted to be close to 10 percent. This is in line with Bank Mandiri's focus on optimizing the wholesale business as the driving wheel of the company's business, including the value chain from upstream to downstream which is the customer's ecosystem.

Likewise, regarding profit, based on analysis, Mandiri is expected to be able to maintain the growth rate of profit in the same range as the first quarter of 2023.

"There is information circulating in the market, the profit in the second quarter of 2023 Mandiri is able to overtake BCA's profit. For certainty, we'll just have to wait during the BMRI public expose," he said.

If you look at the development of performance in the first quarter of 2023, Kiswoyo sees that Mandiri is expected to be able to reduce the quality credit ratio of underprivileged / NPL, far below regulatory provisions.

The journey of BMRI's share price, which is predicted to continue to create new records, is also supported by a cheap valuation with a lower price to book value (PBV) ratio than the industrial average PBV. Currently, PBV BMRI is 2.08 lower than BBCA, whose PBV is 4.83. Investors will certainly see this as an investment opportunity in BMRI shares.

As is known, Bank Mandiri has just received an award as the best bank in Indonesia according to Euromoney. The prestigious award was won by Mandiri, after being judged to have recorded increased signatures in various aspects. One of them is the success of digital transformation carried out.

As of June 2023, the Livin' by Mandiri application has been downloaded almost 28 million times. The digital platform has also managed more than 1.3 billion transactions, or an increase of 70 percent year-on-year (YoY). Likewise, the total value of Livin' by Mandiri transactions reached IDR 1,500 trillion, an increase of 65 percent YoY.

"With prudent lending and implementing strict GCG principles, and supported by conducive national economic conditions, I am optimistic that BMRI's fundamental performance at the end of 2023 will be much higher than last year, with its projected share price continuing to record all time high until the end of 2023," concluded Kiswoyo.