Amar Bank Records 30.8 Percent Revenue Growth, FAC Sekuritas Recommends 'Buy' With 31 Percent Increase Potential

Photo: Doc. Amar Bank

JAKARTA - PT Bank Amar Indonesia Tbk (Amar Bank, IDX: AMAR) affirms its commitment to support Indonesia's economic growth, especially in the Micro, Small and Medium Enterprises (MSMEs) sector.

The results of the latest FAC Sekuritas Indonesia report show that Amar Bank continues to strengthen market confidence with solid financial performance in the third quarter of 2024. FAC Sekuritas Indonesia provides a "Buy" recommendation with a 12-month target price of IDR 294, this price target reflects the potential for an increase of 31% compared to AMAR's share price at the close of the market on August 30, 2024, which amounted to IDR 224.

Amar Bank is consistent with efforts to strengthen the MSME sector. This effort is in line with the Indonesian government's strategic focus on making MSMEs the backbone of the economy. This is reflected in bank lending reaching IDR 2.8 trillion as of June 2024.

Most of this growth is driven by financing to the MSME sector, which directly supports the Indonesian government's goal of expanding credit access to this important sector. The government's National Economic Recovery (PEN) program has repeatedly emphasized the importance of MSMEs in encouraging long-term economic resilience and job creation, and Amar Bank is at the forefront of this agenda.

Amar Bank's interest income grew by 30.8 percent year-on-year (YoY) to Rp573.07 billion in the second quarter of 2024, compared to Rp438.18 billion in the second quarter of 2023. Simultaneously, Bank Amar's net profit grew by 15.3 percent year-on-year, to Rp97.78 billion from Rp85.03 billion in the second quarter of 2023.

The online segment, which jumped 32.7 percent YoY to IDR 450 billion, now accounts for 71.1 percent of total revenue, showing bank shortages in digital banking, an area that is an important focus in national digital economic growth.

In line with his commitment to the MSME sector, Amar Bank is also focused on developing innovative financial solutions that are tailored to meet this business needs. One of the main initiatives is the development of Embeddd Banking services.

SVP Finance Amar Bank, David Wirawan, explained that the Embedded Banking solution is designed to provide financial tools and services that are integrated directly into partner platforms, enabling MSMEs to manage their banking needs more efficiently and safely.

"By simplifying transactions, providing easier credit access, as well as integrating banking services into daily business operations, Amar Bank helps MSMEs overcome financial barriers and accelerate their growth," he said in a written statement, Wednesday, September 11.

Although third-party funds (DPK) decreased by 6.77 percent due to decreased time deposit balances, Amar Bank's strategic focus in increasing the CASA (current account saving account) ratio through digital banking channels emphasized his dedication to modernizing financial services for businesses and individuals.

Amar Bank's strong capital adequacy ratio (CAR) shows its financial strength and its ability to support sustainable growth while managing potential risks. The ratio of operating costs to revenue (BOPO) of 83.96 percent also shows bank operational efficiency, which contributes to an increase in asset returns ratio (ROA) by 5.44 percent and equity returns (ROE) by 6.0 percent.

FAC Sekuritas assessed that with a strong focus on financing MSMEs, Embedded Banking, and digital banking innovation, Amar Bank is in the right position to support Indonesia's economic growth goals, as well as offering attractive returns for investors.