Three Securities Of Elaborative Positive Performance Amar Bank, Annual Net Profit Grows 190 Percent

Photo: Doc. Amar Bank

JAKARTA - PT Bank Amar Indonesia Tbk (Amar Bank), a digital bank that serves the retail and MSME segments, continues to maintain and improve its best performance. This is evidenced by the significant growth in net profit, a consistent increase in net interest income, stable lending, to the innovative strategies launched this year.

The following is an important note regarding Amar Bank's extraordinary performance based on reports from three securities, including NH Korindo Sekuritas Ind PT Bank Amar Indonesia Tbk (Amar Bank), digital banks that serve the retail and MSME segments, continue to maintain and improve their best performance. onesia (NKHSI), Reliance Sekuritas Indonesia, and Sinarmas Sekuritas:

Recording Exponential Net Profit Growth: Amar Bank managed to record a year-on-year (YoY) net profit growth of 193.81 percent to IDR 162 billion. It increased significantly compared to the same period in 2022 which recorded a loss of IDR 172.87 billion.

Quartal-on-quartal (QoQ) also recorded an increase of +52.43 percent to Rp77.14 billion in the third quarter of 2023 (an increase from the second quarter of 2023 of Rp50.61 billion). Specifically, Reliance Sekuritas recorded Amar Bank's net profit at the end of 2023 was able to exceed the previously targeted estimate of Rp84.9 billion.

Sustainable Net Interest Revenue: Amar Bank's Net Interest Revenue on a YoY basis increased 28.29 percent to Rp643.84 billion, or a 16.06 percent increase in QoQ to Rp243.43 billion. Two driving factors came from strong credit growth of 15.56 percent YoY and a significant decrease in interest expense of 48.92 percent YoY or Rp52.92 billion, when compared to 2022 results of Rp106.61 billion.

Even on a quarterly basis, interest expense fell -21.26 percent to Rp15.14 billion in the third quarter of 2023 compared to Rp19.23 billion in the second quarter of 2023.

Cash Contributions Drive Loan Growth: Credit Growth Increases to IDR 2.5 trillion, increases 10.63 percent on a quarterly basis and grows 15.56 percent YoY. In maintaining this growth, Amar Bank remains focused on implementing the right strategy and puts forward the precautionary principle. It is evident from the level of non-performing loans (NPL) which fell 28 Bps QoQ to 1.56 percent in the third quarter of 2023.

As a digital loan platform, Tunaiku contributes to the largest lending by contributing 57.9 percent in the third quarter of 2023 from all loans. In addition, Amar Bank also focuses on increasing the contribution of the credit segment to business banking.

The Amar Bank application and Brankas Innovation Improve CASA Ratio Growth: CASA ratio growth YoY also increased by 24.21 percent. CASA's consistent growth is expected to periodically reduce Amar Bank's Cost of Funds (CoF).

The success of Amar Bank's strategy to reduce high-cost funds is reflected in the Amar Bank digital banking application, which has been downloaded more than 500 thousand times. In addition, Brankas' latest digital savings feature from Amar Bank, an innovation that utilizes AI technology to provide full protection on customer assets, is also a driving factor for CASA's growth. CASA is predicted to grow moderately with a CAGR of 9.0 percent from 2023 to 2027.

Potential and Projection of AMAR Share Prices: In the midst of a slick performance record, three securities projected AMAR's share price target. Reliance Sekuritas refers to Amar Bank's performance which exceeds expectations setting Amar's share price at IDR 418 per share (with BELI's recommendation).

Sinarmas Sekuritas in its report also recorded that AMAR managed to perform above expectations so that it continued to maintain Amar's share purchase price rating at IDR 410. Furthermore, NHKSI recommended that AMAR's share price be IDR 400 per share by approximating the PBV Ratio Forward valuation. NHKSI highlighted various recommendation support factors, including the development and implementation of Collaborative Embedding & Financing which pushed Amar Bank's credit growth to increase in the last three years (2020-2023).

"Aggressive growth is the result of Amar Bank's extraordinary performance in the midst of macroeconomic challenges. Right decision-making and increasing connectivity in the digital ecosystem with strategic partners have provided a significant impetus to our performance. As a digital trailblazing of banks that utilizes the latest technology to provide innovative financial solutions, Amar Bank continues to be committed to providing comprehensive digital financial services to improve the quality of life of individuals and support MSMEs," President Director of PT Bank Amar Indonesia Tbk, Vishal Tulsian.