Indonesia banks' loan growth likely to jump 23%

But profit may be disappointing.

According to Maybank Kim Eng, Indonesia banks' overall net profit may disappoint, despite strong top line earnings. Indonesia banks 1Q13 earnings season will kick start today with Bank Danamon (BDMN.IJ) and Bank Tabungan Negara (BBTN.IJ) reporting after market close. 

"Overall, our banks’ net interest income (NII) is likely  to be stable, reflecting 23% YoY loan growth and 19% YoY current accounts & savings accounts (CASA) growth," Maybank Kim Eng said in a report.

Here's more: 

But net profit may disappoint by 3% from our forecast, mainly weighed by provisioning expense. Our FY13 earnings estimates are largely inline with consensus.

From 1Q13 we expect: 1) Shifts in deposit mix to CASA. This might have occurred at the cost of smaller banks in the sector. 2) Banks expanding in consumer lending, other than automotive financing, to post higher than the 23% YoY average growth. 3) Non-Performing Loans (NPL) to display a seasonal high. While the rate remains below the 5% limit, sectors like manufacturing and trading show relatively higher lending risk.