On Tuesday, JPMorgan (NYSE:JPM) upgraded Bank Jago Tbk PT (ARTO:IJ) from Neutral to Overweight, while also increasing the price target to IDR3,200 from IDR3,000. The upgrade follows the bank's strong performance, including a significant year-over-year loan growth of 59% in September 2023. Additionally, the bank has shown an 82% increase in non-interest income and has maintained controlled costs, with an 8% year-over-year rise in the first nine months of 2024.
The analyst from JPMorgan noted that Bank Jago's asset quality remains robust, with non-performing loans (NPL) at 0.23% and provisions at 148 basis points during the same period. The positive outlook is further supported by the anticipation of a sharper increase in foreign exchange-led fee income following the bank's license approval in October 2024.
Bank Jago, despite being a smaller player in the market with a loan/deposit market share of 23/20 basis points, is expected to scale up deposits through innovative products. The bank's GoTo Tabungan is one such product that is likely to influence shifts in the current and savings account (CASA) ratio and the cost of funds (CoF).
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