Morgan Stanley - Indonesia Banks - 6132011

June 13, 2011

Indonesia Banks Upgrade to Attractive…

What's Changed Industry View: Indonesia

Banks In-Line to Attractive

BBRI.JK From Rp7,200 to Rp7,700BBCA.JK From Rp6,116 to Rp7,000BDMN.JK From Rp5,000 to Rp5,700

We upgrade Indonesian Banks to Attractive: High returns, strong GDP growth and an underpenetrated market make Indonesian banks attractive in a regional context, in our view. They should maintain above regional-industry growth, yet trade in line on 2012e P/E. In our defensive regional banks portfolio, we think Indonesia is one of the best ways to buy growth.

Morgan Stanley’s ASEAN economist identifies infrastructure spend as key: Our ASEAN economist, Deyi Tan, estimates future infrastructure investment could lift GDP growth to 7.2% by 2015 (8% in the bull case). We believe this could be a driver of stronger loan growth. To reflect this view, we assign a 35% probability to our bull-case valuation outcome (which assumes 25% loan CAGR), 60% to our base case (20% loan CAGR) and 5% to our bear case (15% loan CAGR). Previously, we assigned a 100% probability to our base case. The revised methodology leads us to raise our price targets.

Catalysts and risks: Although we expect inflation pressures to accelerate in 4Q11, easing near-term pressures because of better food and oil comparatives should help sentiment for now. The stocks should also benefit from the rollover of valuation metrics to 2012e as we get closer to year-end. We see the main areas of earnings risk as increased NIM pressure as the change in reference rates on government bonds affects near-term asset yields and rising NPLs in SME books.

BRI most preferred, Danamon least: Our favoured stocks are BRI (attractive valuations and high returns) and Mandiri (attractive valuation and improving business franchise). Danamon remains most vulnerable to increased funding pressures, in our view.

Indonesian Banks Comparative Risk Reward

PT

BEAR

BASE

BULL

currentprice

7%12%

20%

-6%0%

-60%

-40%

-20%

20%

40%

60%

80%

100%

BBRI.JK BMRI.JK BBNI.JK BBCA.JK BDMN.JK

Source: Morgan Stanley Research Estimates; stock prices as of June 10, 2011 Indonesian Banks Valuation Summary Summary BRI Mandiri BNI BCA Danamon

Price Target 7,700 7,850 4,000 7,000 5,700 Fair Value 6,743 6,615 3,346 6,139 4,922 Current Price 6,300 7,000 3,750 7,000 6,050 Upside/ Downside from PT 22.2% 12.1% 6.7% 0.0% -5.8%Recommendation OW OW EW EW EW

Cost of Equity 11.2% 11.2% 11.3% 10.8% 12.1%Risk Premium 3.5% 3.5% 3.5% 3.5% 3.5%Risk Free 7.4% 7.4% 7.4% 7.4% 7.3%Beta 1.09 1.09 1.12 0.97 1.38

Other TV assumptionsSustainable RoE 11.2% 11.2% 11.3% 10.8% 12.1%Payout Ratio 73.0% 73.5% 73.5% 72.0% 75.0%Sustainable Growth 3.0% 3.0% 3.0% 3.0% 3.0%(RoE-Sus G)/(CoE-Sus G) 1.00 1.00 1.00 1.00 1.00

Current 2011 PER 11.4 13.5 13.1 18.0 14.2 Current 2012 PER 10.0 11.7 10.4 15.3 12.3 Implied TP 2011 PER 13.9 15.2 14.0 18.0 13.4 Implied TP 2012 PER 12.2 13.1 11.1 15.3 11.6 LT Average PER 10.1 10.9 10.9 9.8 12.4

Current 2010 P/B 4.12 3.56 2.11 5.02 3.01 Current 2011 P/B 3.16 2.53 1.89 4.33 2.65 Implied TP 2010 P/B 5.04 3.99 2.25 5.02 2.83 Implied TP 2011 P/B 3.86 2.84 2.01 4.33 2.50 LT Average P/B 3.28 1.62 1.62 2.74 4.89

Current 2011 Div. Yield 1.8% 2.2% 2.3% 2.2% 3.6%Current 2012 Div. Yield 2.0% 2.7% 2.9% 2.6% 4.2%Implied TP 2011 Div. Yield 1.5% 2.0% 2.1% 2.2% 3.9%Implied TP 2012 Div. Yield 1.7% 2.4% 2.7% 2.6% 4.5%L T Average Div. Yield 4.5% 3.6% 3.6% 4.0% 3.8%

Source: Morgan Stanley Research Estimates; stock prices as of June 10, 2011

Morgan Stanley does and seeks to do business with companies covered in Morgan Stanley Research. As a result, investors should be aware that the firm may have a conflict of interest that could affect the objectivity of Morgan Stanley Research. Investors should consider Morgan Stanley Research as only a single factor in making their investment decision. For analyst certification and other important disclosures, refer to the Disclosure Section, located at the end of this report. += Analysts employed by non-U.S. affiliates are not registered with FINRA, may not be associated persons of the member and may not be subject to NASD/NYSE restrictions on communications with a subject company, public appearances and trading securities held by a research analyst account.

Morgan Stanley Asia (Singapore) Pte.+

Nick Lord [email protected] +65 6834 6746

Edward Goh [email protected] +65 6834 8975

M O R G A N S T A N L E Y R E S E A R C H A S I A / P A C I F I C

Industry View Attractive

2

M O R G A N S T A N L E Y R E S E A R C H

June 13, 2011 Indonesia Banks

Upgrade to Attractive… We are overweight Indonesian Banks from a regional perspective

High returns, strong GDP growth and an underpenetrated banking market make Indonesian banks attractive in a regional context, we believe. They should maintain above regional industry growth, yet trade in line on a 2012e P/E basis. In our defensive regional banks portfolio, Indonesia is one of the best ways to buy growth, in our view.

In addition, Morgan Stanley’s Head of Asia/Pacific Banks, Anil Agarwal, is increasingly concerned about funding costs across the region, as strong loan growth is not matched with deposit growth. Despite strong forecast loan growth in Indonesia, LDRs are not stretched, and the ‘Big 4’ Indonesian banks have a dominant share of the CASA market, which offers them some defence against rising deposit costs. BCA and Mandiri have the best deposit franchises, in our view. Of the two, we think Mandiri offers the best value.

Exhibit 1 Indonesia set to post some of the industry’s highest loan growth rates in the region

0.0%

5.0%

10.0%

15.0%

20.0%

25.0%

30.0%

Australia Korea Indonesia Singapore HK India

Loan

Gro

wth

2010 2011e 2012e Source: Central Banks, Morgan Stanley research, e=Morgan Stanley Research estimates

Exhibit 2 …yet LDRs are not stretched

0%

20%

40%

60%

80%

100%

120%

140%

Thaila

nd

Austra

liaKore

a

Taiwan

Indon

esia

Malays

ia

Singap

ore India

China HK

LDR

(1Q

11)

Source: Central Banks, CEIC, Morgan Stanley Research Exhibit 3 Big 4 Indonesian banks dominate deposit market Market share table 2009 Savings Demand Time TotalMandiri 22.6% 20.2% 16.2% 19.0%BCA 19.6% 12.7% 7.3% 12.8%BRI 20.8% 13.9% 12.4% 15.2%BNI 9.4% 11.0% 9.2% 9.6%Others 27.6% 42.2% 54.9% 43.3%

Source: Company Reports, Morgan Stanley Research

Morgan Stanley’s ASEAN Economist identifies infrastructure spend as key

In a recent report (Indonesia Infrastructure: A US$250bn Opportunity, dated May 10, 2011), our ASEAN economist, Deyi Tan, estimates future infrastructure investment could lift GDP growth to 7.2% by 2015 and, in her bull-case scenario, as high as 8%. Infrastructure spend is likely to be an important source of positive surprises for the economy as a whole and the bank sector in particular. Morgan Stanley’s GDP forecasts for Indonesia are driven by the expectation that infrastructure spend will rise from 3.9% of GDP in 2009 to 5.9% by 2015e (and 7% in the bull case). Deyi believes that her base and bull cases are ahead of consensus as the government targets 5% spend per annum while consensus forecasts are based on ~4% (unchanged from current infrastructure investment rates).

For banks, we expect the strong infrastructure spending to have two effects. The first is an increase in demand for Infrastructure loans, although infrastructure lending is still a small component of total bank lending. The second is more important, therefore: the multiplier effect from stronger GDP growth and, from the bank sector standpoint, more efficient GDP growth as increased infrastructure spend allows the benefits of this growth to be more widely felt across the economy.

3



Of course, we acknowledge the risk that increased infrastructure spend will be difficult to implement and, therefore, set three valuation scenarios to reflect the risks. Our bull case assumes the Land Acquisition Act passes through parliament, infrastructure spend increases and GDP growth reaches 8% by 2015e. In this scenario, we assume 25% CAGR in lending. Our base case assumes the Land Acquisition Act passes, infrastructure spend is still subject to some blockages and GDP growth is 6.5%. In this environment, loans grow at a CAGR of 20%. Our bear case assumes limited progress in infrastructure investment, GDP falls to 6%, and loans expand at 15% CAGR.

To reflect our economist’s views, we now assign a 35% probability to our bull-case valuation outcome, 60% to our base case and 5% to our bear case, where previously we assigned a 100% probability to our base case. This has led us to increase our price targets for the shares of BRI, BCA and Danamon.

Exhibit 4 Probability-weighted Price Targets

BRI Mandiri BNI BCA DanamonCurrent Price 6,300 7,000 3,750 7,000 6,050

Bull @ 6.0% RR 9,859 10,270 5,393 8,808 7,435 Bull @ 7.4% RR 8,184 8,591 4,519 7,251 6,373 Base @ 7.4% RR 6,743 6,615 3,346 6,139 4,922 Bear @ 7.4% RR 4,690 5,585 2,679 5,402 3,231 Bear @ 6.0% RR 4,074 5,204 2,512 4,664 2,884

WeightingsBull @ 6.0% RR 35.0% 35.0% 35.0% 35.0% 35.0%Base @ 7.4% RR 60.0% 60.0% 60.0% 60.0% 60.0%Bear @ 6.0% RR 5.0% 5.0% 5.0% 5.0% 5.0%

Price Target 7,700 7,850 4,000 7,000 5,700

2011 EPS 553 518 286 389 4262012 EPS 632 599 359 458 491

2011 PER 11.4 13.5 13.1 18.0 14.22012 PER 10.0 11.7 10.4 15.3 12.3

2011 PER on TP 13.9 15.2 14.0 18.0 13.42012 PER on TP 12.2 13.1 11.1 15.3 11.6

Upside / Downside 22.2% 12.1% 6.7% 0.0% -5.8%Upside to base 7.0% -5.5% -10.8% -12.3% -18.6%Upside to bull 56.5% 46.7% 43.8% 25.8% 22.9% Source: Factset, Morgan Stanley Research Estimates Exhibit 5 Indonesian Banks: Changes in Price Targets Industry View In-line to AttractiveBBRI.JK Rp7,200 to Rp7,700BBCA.JK Rp6,116 to Rp7,000BDMN.JK Rp5,000 to Rp5,700

Source: Morgan Stanley Research Estimates

Inflation and earnings rollover are near-term catalysts: Easing near-term inflation pressures due to better food and oil comparatives should help near-term sentiment. Whilst we expect inflation pressures to accelerate again in 4Q11, we do

not think this is an issue for now. In addition, we expect the rollover of valuation metrics to 2012e as we get closer to this year’s end should benefit Indonesian banks as we forecast EPS growth of 18% for 2012.

Exhibit 6 Indonesian Banks: 2011-12e P/E

-

2.0

4.0

6.0

8.0

10.0

12.0

14.0

16.0

18.0

20.0

BRI Mandiri BNI BCA Danamon

Cur

rent

P/E

On MS 2011e EPS On MS 2012e EPS MS TP Implied 2012e EPS

Source: Factset, Morgan Stanley Research Estimates

Risks: The main risks to this call are near-term earnings pressures in the 2Q results. The two main areas of concern are:

1.) Increased NIM pressure, as the change in reference rates on government bonds affects near-term asset yields. However, many Indonesian banks already experienced sharp NIM pressure in 1Q because of a full-quarter impact of deposit reserve requirement changes, which took effect in November 2010, and the sluggish loan growth in the quarter. We expect QoQ trends to look better, therefore.

2.) Rising NPLs in the small business book, especially at the state-owned banks. In 1Q11, small business NPLs increased 70bps at Mandiri, 129bps at BRI and 76bps at BNI. In Exhibits 7 to 9, we assess the earnings impact of NPLs for SME increasing to 8%, 10% and 15% of loans, whilst cover remains close to current levels or targets. We do not expect small business NPLs to deteriorate beyond 8% of gross loans, and therefore see limited additional provisioning requirements. However, if the situation were to deteriorate further, BRI and BNI would be most exposed, and Mandiri least exposed.

4



Exhibit 7 BRI: Small Business NPL Sensitivity

p/f 1Q11

Current Gross NPL Ratio 3.05%Current Small Business NPL Ratio 6.48%Current Provision Cover 207%2011e Net Income, Rp bn 13,409 2011e Shareholders' Equity, Rp bn 47,887

Small Business Book NPL Ratio Scenario 1 8.00%Small Book NPLs 4,632 Total NPLs 8,489

Total NPL Ratio 3.41%Provision Cover 185%


Total NPL Ratio 3.87%Provision Cover 163%Aft. Tax Additional Provision to Keep Cover at 185% 1,718

as a % of 2011e Net Income 12.8%as a % of 2011e Shareholders' Equity 3.6%




Source: Company Reports, Morgan Stanley Research Estimates

Exhibit 8 Mandiri: Small Business NPL Sensitivity

p/f 1Q11











5



Exhibit 9 BNI: Small Business NPL Sensitivity

p/f 1Q11











BRI most preferred, Danamon least preferred

Our favoured stocks in the sector are BRI and Mandiri, both of which offer relatively attractive valuations, in our view. In the case of BRI, this is coupled with high RoEs; in the case of Mandiri, with an improving business franchise. We think Danamon remains most vulnerable to increased funding pressures and it remains our least favoured stock.

In addition to our target price changes, we have initiated coverage on Mandiri and BNI (see our accompanying initiation reports on the two banks, also published today). Our sector preferences now stand in the following order: BRI, Mandiri, BNI, BCA and Danamon. We examine the reasons in the following paragraphs.

BRI (OW) remains our preferred pick for the sector. Fundamentally, we think BRI possesses a solid, high-return franchise with a positive skew towards the higher yielding microfinance business. Moreover, amongst its peers, it currently trades at the lowest valuations (see Exhibit 2) on both our 2011e and 2012e EPS, offering investors significant valuation support.

We believe that the key risk is lingering concern over NPL issues in the small/medium business book. This was a key contributor to the lackluster performance in the stock price in 2010. While 1Q11 results showed that pressures in the medium book have now eased, we did see the first signs of deterioration in the small business book. Currently, the small business book NPLs are at 6.48% of small business loans. Should this remain at < 8%, BRI would not require additional provisioning. However, if the small business book NPL ratio were to hit 10% or more, BRI would likely have to take an after-tax hit of 12.8% of our 2011e NPAT numbers to ensure provision cover is maintained at the historical level of c.185% (see Exhibit 7). However, the risk of continued negative sentiment is probably greater than the earnings risk.

Mandiri (OW) is our next favored pick as we expect the bank to deliver the second strongest NPAT growth in the industry during 2010-2015, largely as a result of margin expansion. We do not think this is yet in the price. On funding costs, Mandiri has already shown the biggest improvement in the industry, and with its recent push into microfinance, we expect asset yields to improve alongside, driving NIM expansion.

Moreover, we do not think the market fully appreciates the improvements that Mandiri has made to its franchise over 2005-2010. We believe that Mandiri will enjoy some benefits from the 2005–2010 transformation program over the next few years.

Exhibit 10 Average Funding Costs: Significant Improvement for Mandiri

0.0%

2.0%

4.0%

6.0%

8.0%

10.0%

12.0%

14.0%

2001

2002

2003

2004

2005

2006

2007

2008

2009

2010

2011

e20

12e

2013

e20

14e

2015

e20

16e

2017

e20

18e

2019

e

Mandiri Danamon BRI BCA BNI Sector Source: Company Reports e = Morgan Stanley Research estimates

BNI (EW), having undergone a major transformation program in 2005, has now a much cleaner loan book. As such, we expect RoAA and RoAE to improve. In addition, BNI should produce the industry’s fastest EPS growth over the next five years, driving our preference for this stock over BCA. However,

6



we believe that the current P/E already reflects this faster growth (especially after adjusting for the ‘unusual’ element of loan recoveries). We also believe that the market has ignored BNI’s weaker franchise and lower returns. This means the group would be less able to take advantage of the bull case if that is the outcome.

Exhibit 11 Indonesian Banks: ROAE, 2010-2019e

0.00%

5.00%

10.00%

15.00%

20.00%

25.00%

30.00%

35.00%

40.00%

2010 2011e 2012e 2013e 2014e 2015e 2016e 2017e 2018e 2019e

RO

AE (%

)

Mandiri Danamon BRI BCA BNI Sector Source: Company Reports, e = Morgan Stanley Research estimates

BCA (EW), at 18x 2011e P/E, in our view, is fully valued for its fundamentally solid franchise. BCA is a well-run bank with pristine credit quality (NPL ratio at 0.64%). The lower ROAE and margins are reflective of a business that is skewed towards lower yielding corporate lending. BCA, as a strong liability franchise, has 77% of its total deposit balances in low-cost CASA. However, it is this particular liability franchise that is also posing a challenge for the bank as the sector transits into a lower interest rate environment. BCA has traditionally made money from placing its low-cost deposits in higher yielding SBIs/SBNs. A lower interest rate environment has begun to hurt this source of income as shown in Exhibit 12. What used to be a situation where deposit income could more than comfortably cover operating costs is no longer the case.

Exhibit 12 BCA: Non-interest Income Split

0

5000

10000

15000

20000

25000

2004 2005 2006 2007 2008 2009 2010Deposit income Payment income Other NII (net of impairment)OOI Securities gains Costs


Exacerbating this are the regulatory actions by Bank Indonesia (BI) to reduce lending rates and spur loan growth. To date, BI has already taken several steps in this direction. The first includes mandating all banks to publish prime lending rates in a bid to promote competition and expand loan growth. Second, on the deposit side, BI has introduced an LDR-linked reserve requirement ratio1 that penalizes banks with low LDR ratios. BCA, with a low LDR of 55%, is most adversely affected by the current interest rate environment and regulatory actions. We believe that it will be able to offset some of this decline in liability-driven income by generating higher asset-driven profits. But we still think risks for BCA are skewed more to the downside than upside and maintain our Equal-weight rating on the stock.

1 - Lower limit of the LDR targeting range set at 78% and upper limit at 100% - Banks with LDR outside this range will be subject to the following disincentives: - Banks with LDR below lower limit face disincentive of an extra reserve requirement at 0.1x rupiah depositor funds for each 1% of LDR below the lower limit - Banks with LDR above the upper limit and with less than 14% CAR face a disincentive of an extra reserve requirement at 0.2x rupiah depositor funds for each 1% above the upper limit

- Banks holding an LDR above the upper limit but with CAR equal to or > 14% are not required to maintain additional reserves

7



Danamon (EW), in our view, is trading at fair valuations. It has historically executed well on its core businesses of microfinance and consumer finance. However, the key challenge facing Danamon stems from funding. The bank is overly reliant on wholesale funding. Unlike BCA, for instance, Danamon’s deposit base is made up of 65% time vs. 35% CASA deposits. We are already seeing signs of increased competition for liquidity as 3M JIBOR began ticking up in the past two months. As the competition for deposits intensifies, banks will likely have to pay up for funding. Risks for a wholesale funds-reliant franchise like Danamon’s are clearly skewed towards the downside by way of increased pressure on NIMs from higher funding costs. Hence, we least prefer Danamon amongst the five bank stocks we cover and reiterate our Equal-weight rating.

Exhibit 13 Indonesian Interest Rates, Jan 2005-Apr 2011

2.00

4.00

6.00

8.00

10.00

12.00

14.00

16.00

18.00

Jan-

05

Apr-

05

Jul-0

5

Oct

-05

Jan-

06

Apr-

06

Jul-0

6

Oct

-06

Jan-

07

Apr-

07

Jul-0

7

Oct

-07

Jan-

08

Apr-

08

Jul-0

8

Oct

-08

Jan-

09

Apr-

09

Jul-0

9

Oct

-09

Jan-

10

Apr-

10

Jul-1

0

Oct

-10

Jan-

11

Apr-

11

Rat

es (%

)

Policy Rate 1m TD 3m TD 3m Interbank ID 10y T Bond USD 10y T Bond Source: Bank Indonesia, CEIC, Morgan Stanley Research

8



BRI: Financial Summary PROFIT & LOSS STATEMENT FY07 FY08 FY09 FY10 FY11e FY12e FY13e BALANCE SHEET FY07 FY08 FY09 FY10 FY11e FY12e FY13eNet interest income 16,034 18,752 21,924 32,888 36,922 43,315 50,674 Cash 5,041 6,750 8,139 9,976 9,871 9,537 10,088Non interest income 2,427 3,380 4,124 4,615 5,168 5,817 6,503 Securities & Bills 39,383 41,154 41,046 38,132 43,229 49,449 57,551Total income 18,461 22,132 26,048 37,503 42,089 49,132 57,177 Due from banks 46,368 35,305 62,188 108,705 125,011 137,512 144,388Operating expenses 8,964 10,843 11,959 16,163 18,906 21,927 25,431 Gross loans 113,973 161,108 208,123 252,382 302,969 369,622 447,242Underlying profit 9,497 11,289 14,089 21,340 23,183 27,205 31,746 Provisions 6,958 8,005 11,368 13,991 16,796 20,334 23,428Loan loss 1,943 2,844 5,799 7,866 7,705 9,432 10,227 Net loans 107,015 153,103 196,754 238,390 286,172 349,288 423,814Goodwill 0 0 0 0 0 0 0 Intangibles 0 0 0 14 14 14 14Associates/ Other 226 377 1,601 1,434 1,283 1,376 1,270 Other 5,928 9,766 8,819 9,068 9,268 9,471 9,684Net profit pre tax 7,780 8,822 9,891 14,908 16,761 19,149 22,788 Total assets 203,735 246,077 316,947 404,286 473,566 555,272 645,540Income tax 2,942 2,864 2,583 3,436 3,352 3,830 4,558 Deposits 165,600 201,537 255,928 333,652 388,705 454,785 527,550Net profit post tax 4,838 5,958 7,308 11,472 13,409 15,319 18,231 Due to banks 1,611 3,428 4,450 5,845 6,722 7,394 8,134Minorities 0 0 0 0 0 0 0 Debt 4,523 4,067 16,290 9,368 9,836 10,328 10,844Reported profit 4,838 5,958 7,308 11,472 13,409 15,319 18,231 Other 12,564 14,687 13,022 18,747 20,415 22,240 23,320Preference divs - - - - - - - Total liabilities 184,297 223,720 289,690 367,612 425,679 494,747 569,848NPAT attributable 4,838 5,958 7,308 11,472 13,409 15,319 18,231 Net Assets 19,438 22,357 27,258 36,673 47,887 60,525 75,692Adj (cash) earnings 4,838 5,958 7,308 11,472 13,409 15,319 18,231 Common equity 19,438 22,357 27,257 36,673 47,887 60,525 75,692

Hybrid/ pref 0 0 0 0 0 0 0Reported EPS IDR 202 IDR 249 IDR 305 IDR 478 IDR 559 IDR 639 IDR 760 Retained earnings 9,978 13,325 10,810 19,148 29,363 41,000 55,167- growth 12.9% 23.1% 22.6% 57.0% 16.9% 14.2% 19.0% Reserves (9,978) (13,325) (10,810) (19,148) (29,363) (41,000) (55,167)Adj (cash) EPS IDR 200 IDR 246 IDR 302 IDR 473 IDR 553 IDR 632 IDR 752 Equity attributable 19,438 22,357 27,257 36,673 47,887 60,525 75,692- growth 12.7% 23.1% 22.7% 57.0% 16.9% 14.2% 19.0% OEI 0 0 0 0 0 0 0Ordinary DPS IDR 101 IDR 110 IDR 92 IDR 92 IDR 112 IDR 128 IDR 152 Total equity 19,438 22,357 27,257 36,673 47,887 60,525 75,692Ordinary pay out ratio 51% 45% 30% 19% 20% 20% 20% Ord share outstanding 24 24 24 24 24 24 24Special DPS - - - - - - - Fully diluted weighted ave 24 24 24 24 24 24 24Returns Analysis FY07 FY08 FY09 FY10 FY11e FY12e FY13e Book value per share IDR 811 IDR 932 IDR 1,137 IDR 1,529 IDR 1,997 IDR 2,524 IDR 3,156Net interest yield 8.9% 8.3% 7.8% 9.1% 8.4% 8.4% 8.4% NTA per share IDR 811 IDR 932 IDR 1,137 IDR 1,529 IDR 1,996 IDR 2,523 IDR 3,156Net interest margin 9.46% 8.88% 8.28% 10.70% 9.75% 9.70% 9.67%Ave int earn assets/ ave assets 94.5% 93.9% 94.1% 85.2% 86.2% 86.8% 87.3% Ave int earn assets 169,403 211,164 264,775 307,255 378,498 446,569 524,049Cash non-interest yield 1.4% 1.5% 1.5% 1.3% 1.2% 1.1% 1.1% - growth 29.8% 24.7% 25.4% 16.0% 23.2% 18.0% 17.4%Operating exp/ assets 5.0% 4.8% 4.2% 4.5% 4.3% 4.3% 4.2% Ave int bearing liabs 154,888 196,594 249,365 317,236 380,566 442,531 513,313Loan loss/ assets 1.1% 1.3% 2.1% 2.2% 1.8% 1.8% 1.7% - growth 30.1% 26.9% 26.8% 27.2% 20.0% 16.3% 16.0%Loan loss/ RWA 1.80% 1.95% 3.35% 3.41% 2.68% 2.79% 2.55% RWAs 107,711 145,581 173,068 230,447 287,161 337,846 400,409RWA/ assets 60% 65% 61% 64% 65% 66% 67% - growth 35.9% 35.2% 18.9% 33.2% 24.6% 17.7% 18.5%Pretax ROA 4.21% 3.75% 2.94% 3.74% 3.53% 3.46% 3.58% Growth in average loans 23.2% 34.7% 34.2% 24.7% 20.6% 21.1% 21.5%Tax effect (tax/ assets) 1.59% 1.22% 0.77% 0.86% 0.71% 0.69% 0.72% Equity tier 1 14.3% 12.2% 12.2% 12.2% 12.3% 13.3% 13.9%Effective tax rate 37.8% 32.5% 26.1% 23.0% 20.0% 20.0% 20.0% Tier 1 14.3% 12.2% 12.2% 12.2% 12.3% 13.3% 13.9%Associate/ other yield 0.1% 0.1% 0.4% 0.3% 0.2% 0.2% 0.2% Total CAR 15.8% 13.2% 13.2% 13.8% 13.7% 14.5% 14.9%ROA (cash) 2.70% 2.65% 2.60% 3.18% 3.05% 2.98% 3.04% Equity/ assets 10% 9% 9% 9% 10% 11% 12%Leverage 9.9 10.8 11.3 11.3 10.4 9.5 8.8 RWA/ assets 53% 59% 55% 57% 61% 61% 62%Common equity to RWAs 16.9% 14.4% 14.3% 13.9% 14.7% 16.0% 17.0% Ave int earn assets/ ave assets 95% 94% 94% 85% 86% 87% 87%Bal sheet risk (RWA/ assets) 60% 65% 61% 64% 65% 66% 67% Ave int bearing liabs/ ave liabs 96% 96% 97% 97% 96% 96% 96%ROE (cash) 26.6% 28.5% 29.5% 35.9% 31.7% 28.3% 26.8% Loans/ assets 56% 65% 66% 62% 64% 67% 69%Underlying profit'ty (assets) 5.3% 5.0% 5.0% 5.9% 5.3% 5.3% 5.3% Loans/ deposits 69% 80% 81% 76% 78% 81% 85%Underlying profit'ty (equity) 52.3% 54.0% 56.8% 66.8% 54.8% 50.2% 46.6% Securities & Bills / assets 19% 17% 13% 9% 9% 9% 9%Underlying profit'ty (RWAs) 10.2% 8.9% 8.8% 10.6% 9.0% 8.7% 8.6%

NPLs/ loans 3% 3% 3% 3% 3% 3% 3%Sh'holder Cash Flow FY07 FY08 FY09 FY10 FY11e FY12e FY13e Provision cover 179% 177% 157% 204% 185% 204% 201%Adj (cash) earnings 4,838 5,958 7,308 11,472 13,409 15,319 18,231 Loan Loss / Ave. Gross Loans 1.88% 2.06% 3.13% 3.42% 2.80% 2.80% 2.50%Sh'holder CF (post RWA growth) 571 278 3,185 2,865 4,902 7,716 8,846 VALUATION FY07 FY08 FY09 FY10 FY11e FY12e FY13ePayout Ratio (Sh'holder profit) 424% 953% 69% 77% 55% 40% 41% Price/ adj earnings 31.5 25.6 20.9 13.3 11.4 10.0 8.4

Price/ book 7.8 6.8 5.5 4.1 3.2 2.5 2.0Loan Yield 19.02% 17.18% 16.74% 18.19% 17.25% 16.87% 16.45% Price/ NTA 7.8 6.8 5.5 4.1 3.2 2.5 2.0Asset Yield 13.33% 12.88% 12.92% 14.52% 13.68% 13.63% 13.58% Dividend yield 1.6% 1.8% 1.5% 1.5% 1.8% 2.0% 2.4%Cost of Deposits 4.01% 4.00% 4.85% 0.00% 3.96% 4.03% 4.06% Free cash flow yield 0.4% 0.2% 2.1% 1.9% 3.2% 5.1% 5.9%Cost of Funds 4.23% 4.30% 4.93% 3.70% 3.63% 3.69% 3.72% INTERIMS 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11Spread 9.10% 8.58% 7.99% 10.82% 10.05% 9.94% 9.86% Net interest income 5,544 5,945 6,703 7,016 7,311 11,858 8,173Return on Free Funds 0.36% 0.30% 0.29% (0.12%) (0.29%) (0.24%) (0.19%) Non interest income 1,084 779 659 684 765 2,508 1,173Net Interest Margin 9.46% 8.88% 8.28% 10.70% 9.75% 9.70% 9.67% Total income 6,628 6,724 7,362 7,700 8,076 14,366 9,347

Opertaing expenses 2,816 3,849 2,852 3,434 3,462 6,415 3,466Interest exp/ int inc 29.0% 31.1% 35.9% 26.3% 28.7% 28.9% 28.8% Underlying profit 3,811 2,875 4,509 4,266 4,613 7,951 5,881Non int inc/ total inc 13.1% 15.3% 15.8% 12.3% 12.3% 11.8% 11.4% Loan loss 2,712 412 1,514 1,826 1,888 2,638 2,029Trading Profits/ total inc n.a n.a n.a n.a n.a n.a n.a Goodwill 0 0 0 0 0 0 0Ave headcount 39,018 37,843 37,282 37,321 37,644 37,644 37,644 Associates/ other 674 764 (155) 168 334 1,087 133Personnel cost/ headcount (Rp mn) 135 167 179 222 258 299 347 Profit pre tax 1,774 3,226 2,840 2,609 3,060 6,400 3,985Profit/ headcount (Rp mn) 124 157 196 307 356 407 484 Reported NPAT 1,809 2,007 2,151 2,167 2,339 4,816 3,260Cost/ Income 48.6% 49.0% 45.9% 43.1% 44.9% 44.6% 44.5% NPAT attributable 1,809 2,007 2,151 2,167 2,339 4,816 3,260Effective tax rate 37.8% 32.5% 26.1% 23.0% 20.0% 20.0% 20.0% Adj (cash) earnings 1,809 2,007 2,151 2,167 2,339 4,816 3,260 Source: Company Reports e = Morgan Stanley Research estimates

9



Risk-Reward Snapshot: BRI (BBRI.JK, Rp6,300, OW, PT Rp7,700) Risk-Reward View: Rerating Continues as RoAA Improves

WARNINGDONOTEDIT_RRS4RL~BBRI.JK~

Rp7,700 (+22%)Rp 6,300

Rp4,074 (-35%)

Rp9,859 (+56%)

0

2,000

4,000

6,000

8,000

10,000

12,000

Jun-09 Dec-09 Jun-10 Dec-10 Jun-11 Dec-11

Rp

Price Target (Jun-12) Historical Stock Performance Current Stock Price

Price Target Rp7,700 We derive our valuations from a three-stage Gordon growth model. For our price target, we assign a 60% probability to our base-case valuation, 35% to our bull case, and 5% to our bear case.

Bull Case Rp9,859

14.4x Bull Case 12e EPS

Stable inflation and increased infrastructure investment: Inflation remains controlled, requiring limited policy response. Land Acquisition Act passes, resulting in increased infrastructure spend and 8% GDP growth. BRI increases loan growth to 25% CAGR.

Base Case Rp6,743

10.7x Base Case 12e EPS

Stable inflation outlook, patchy investment in infrastructure: Inflation remains controlled, requiring limited policy response. Infrastructure investment subject to blockages, GDP growth limitedto 6.5% p.a. BRI grows loans at 20% CAGR.

Bear Case Rp4,074

7.5x Bear Case 12e EPS

Rising inflation, no progress in infrastructure investment: Inflation spikes in 2H11, resulting in higher interest rates and a lossof confidence in the economy. Limited progress in infrastructure spend. GDP growth falls below 6%. BRI expands loans at 15%.

Source: Morgan Stanley, FactSet

BRI Bear to Bull Case

4,0744,690

6,743

8,184

9,859

1,675

1,441

2,053

616

7,700

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Bear @8.5% RR

Incrementalfrom 7.4%

RR

Bear @7.4% RR

Base CaseIncremental

Base @7.4% RR

Bull CaseIncremental

Bull @7.4% RR

Incrementalfrom 6% RR

Bull @6.0% RR

Pric

e Ta

rget

TP:


Investment Thesis: Why OW

• We believe BRI’s derating relative to peers’ from 2009 to early 2011 went too far.

• Recent falls in RoAA, exacerbated by credit issues in the SME/commercial book led investors to apply a large risk premium to BRI, in our view.

• In addition, we believe that low capital ratios, a high LDR, plus management distraction over NPL issues gave investors concerns over growth.

• Recent results show many of these pressures now easing. We believe that BRI will regain a more typical relative valuation reflecting its strong returns.

Key Value Drivers

• The key driver of value for Indonesian banks is long-term bond yields. We believe a 1ppt change in the 10-year bond yield affects valuation by ~10%

• At an operational level, we believe that loan growth is key. We forecast 20% 5-year CAGR in lending at BRI.

Potential Catalysts

• Inflation data We believe that a peak in small business book NPLs will further restore faith in the market’s view on credit management.

• NIM certainty – the step-up in NIM has been an important driver of recent stock price performance; further comfort in the level and trajectory of NIM in upcoming results should help the stock re-rate.

Where We Could Be Wrong

• Small business book NPLs rise above 8%;

• NIM declines faster than we forecast.

10



BRI Valuation ModelWe use a three-stage Gordon growth model, which sums the NPV of 10 years of explicit dividend forecasts, 10 years of implicit dividend forecasts, and forecast terminal BV to derive our base case valuation. We then set our price target by assigning 60% probability to our base case valuation, 35%

probability to our bull case and 5% probability to our bear case (see previous page for scenario valuations). On a base-case valuation of Rp 6,743, we arrive at a final price target of Rp7,700 for BRI.

Exhibit 14 BRI 3-Stage Gordon Growth Model Assumptions

Risk Premium 3.50%Risk Free Rate 7.40%Beta 1.09CoE, k 11.2%Sustainable RoE, r 11.2%Payout Ratio 73.0%Sustainable Growth rate, g 3.0%(r - g) / (k - g) 1.00Current Price (Rp) 6,300Fair Value (Rp) 6,743Upside 7%

BRI DPS (Rp) EPS (Rp) Payout Ratio RoE Sus. Growth CoE NTAPS2009 92 302 30% 27% 18% 11.2% 1,1372010e 92 473 19% 31% 25% 11.2% 1,5292011e 112 553 20% 28% 22% 11.2% 1,9962012e 128 632 20% 25% 20% 11.2% 2,5232013e 152 752 20% 24% 19% 11.2% 3,1562014e 183 906 20% 23% 18% 11.2% 3,9192015e 195 964 20% 20% 16% 11.2% 4,7102016e 146 723 20% 14% 11% 11.2% 5,2462017e 224 1,106 20% 18% 14% 11.2% 6,2182018e 277 1,371 20% 19% 15% 11.2% 7,3802019e 339 1,679 20% 19% 15% 11.2% 8,800NPV of forecast dividends 1,091

2020e 336 1,679 20% 19% 15.2% 11.2% 10,1442021e 482 1,927 25% 19% 14.3% 11.2% 11,5892022e 650 2,202 30% 19% 13.4% 11.2% 13,1412023e 824 2,497 33% 19% 12.7% 11.2% 14,8142024e 1,126 2,815 40% 18% 10.8% 11.2% 16,5032025e 1,485 2,971 50% 17% 8.5% 11.2% 17,9882026e 1,682 3,058 55% 16% 7.2% 11.2% 19,3652027e 1,859 3,098 60% 15% 5.8% 11.2% 20,6042028e 1,942 2,988 65% 14% 4.9% 11.2% 21,6502029e 2,122 3,031 70% 13% 3.9% 11.2% 22,559NPV of yr 11-20 dividends 2,658NPV of Terminal Value 2,99412 mth price target 6,74312 mth upside 7%plus yield on dividends paid before 2011 1%12 mth TSR 8%


11



Mandiri Financial Summary PROFIT & LOSS STATEMENT FY07 FY08 FY09 FY10 FY11e FY12e FY13e BALANCE SHEET FY07 FY08 FY09 FY10 FY11e FY12e FY13eNet interest income 12,119 14,445 16,399 20,170 23,519 27,616 33,087 Cash 5,909 8,389 8,868 9,522 4,078 5,183 6,121Non interest income 4,042 5,440 6,622 8,868 10,660 12,173 14,010 Securities & Bills 117,123 113,244 110,594 104,999 99,833 94,860 83,506Total income 16,161 19,885 23,021 29,037 34,179 39,789 47,096 Due from banks 46,456 50,640 62,132 62,478 72,543 83,292 93,951Operating expenses 8,208 9,380 10,591 12,344 14,670 16,281 18,660 Gross loans 138,530 174,498 197,126 244,027 299,100 364,627 445,232Underlying profit 7,952 10,505 12,430 16,693 19,509 23,508 28,437 Provisions 13,042 11,860 12,436 11,482 13,511 14,596 15,036Loan loss 1,740 2,595 1,996 2,956 4,141 5,444 6,558 Net loans 125,488 162,638 184,691 232,545 285,589 350,031 430,196Goodwill 0 0 0 0 0 0 0 Intangibles 0 0 0 263 263 250 237Associates/ Other 120 158 390 236 (67) (67) (67) Other 24,109 23,528 28,332 39,968 84,888 99,977 116,974Net profit pre tax 6,333 8,069 10,824 13,972 15,301 17,997 21,812 Total assets 319,086 358,439 394,617 449,775 547,195 633,593 730,985Income tax 1,986 2,753 3,626 4,603 3,443 3,599 4,362 Deposits 248,405 290,007 320,333 362,212 416,835 484,936 560,728Net profit post tax 4,347 5,315 7,198 9,369 11,859 14,398 17,449 Due to banks 5,410 7,718 10,787 7,657 12,251 13,844 15,644Minorities 1 2 43 151 377 415 457 Debt 12,280 12,208 10,161 5,608 5,608 6,169 6,785Reported profit 4,346 5,313 7,155 9,218 11,481 13,983 16,993 Other 23,740 17,963 18,038 32,228 47,233 52,598 58,764Preference divs - - - - - - - Total liabilities 289,836 327,897 359,318 407,705 481,926 557,546 641,921NPAT attributable 4,346 5,313 7,155 9,218 11,481 13,983 16,993 Net Assets 29,250 30,542 35,298 42,070 65,268 76,046 89,064Adj (cash) earnings 4,346 5,313 7,155 9,218 11,481 13,983 16,993 Common equity 16,946 17,262 17,397 17,459 28,891 28,891 28,891

Hybrid/ pref 0 0 0 0 0 0 0Reported EPS 209 254 341 439 518 599 728 Retained earnings 8,905 13,179 17,859 21,782 33,160 43,468 55,987- growth 78% 22% 34% 29% 18% 16% 22% Reserves 3,286 18 (163) 2,302 2,675 3,128 3,610Adj (cash) EPS 209 254 341 439 518 599 728 Equity attributable 29,136 30,459 35,093 41,543 64,725 75,487 88,487- growth 78% 22% 34% 29% 18% 16% 22% OEI 6 28 189 527 543 559 576Ordinary DPS 109 120 132 175 157 192 233 Total equity 29,143 30,487 35,282 42,070 65,268 76,046 89,064Ordinary pay out ratio 52% 47% 39% 40% 30% 32% 32% Ord share outstanding (bn shares) 21 21 21 21 23 23 23Special DPS - - - - - - - Fully diluted weighted ave (bn shares) 21 21 21 21 22 23 23Returns Analysis FY07 FY08 FY09 FY10 FY11e FY12e FY13e Book value per share 1,409 1,460 1,674 1,979 2,774 3,235 3,792Net interest yield 4.13% 4.26% 4.36% 4.78% 4.72% 4.68% 4.85% NTA per share 1,409 1,460 1,674 1,966 2,763 3,224 3,782Net interest margin 4.88% 5.22% 4.96% 5.57% 5.50% 5.60% 5.80%Ave int earn assets/ ave assets 84.62% 81.62% 87.82% 85.83% 85.78% 83.53% 83.61% Ave int earn assets (reported) 245,883 278,916 334,453 374,205 427,618 493,148 570,459Cash non-interest yield 1.38% 1.61% 1.76% 2.10% 2.14% 2.06% 2.05% - growth 5.5% 13.4% 19.9% 11.9% 14.3% 15.3% 15.7%Operating exp/ assets 2.80% 2.77% 2.81% 2.92% 2.94% 2.76% 2.73% Ave int bearing liabs 235,406 274,657 315,318 350,230 410,477 476,197 551,604Loan loss/ assets 0.59% 0.77% 0.53% 0.70% 0.83% 0.92% 0.96% - growth 4.6% 16.7% 14.8% 11.1% 17.2% 16.0% 15.8%Loan loss/ RWA 1.38% 1.67% 1.08% 1.27% 1.36% 1.45% 1.46% RWAs 136,316 173,533 197,427 266,847 341,959 407,485 488,090RWA/ assets 42.88% 45.73% 49.26% 54.98% 61.07% 63.47% 65.63% - growth 18.3% 27.3% 13.8% 35.2% 28.1% 19.2% 19.8%Pretax ROA 2.12% 2.34% 2.77% 3.25% 3.08% 3.06% 3.21% Growth in average loans 14.1% 22.2% 18.7% 18.7% 23.1% 22.2% 22.0%Tax effect (tax/ assets) 0.66% 0.80% 0.93% 1.07% 0.69% 0.61% 0.64% Equity tier 1 17.0% 12.8% 12.4% 10.5% 14.5% 14.5% 14.4%Effective tax rate 31.36% 34.12% 33.50% 32.94% 22.50% 20.00% 20.00% Tier 1 17.0% 12.8% 12.4% 10.5% 14.5% 14.5% 14.4%Associate/ other yield 0.03% 0.03% 0.07% 0.04% -0.01% -0.01% -0.01% Total CAR 20.7% 15.7% 15.4% 13.4% 15.6% 15.6% 15.5%ROA (cash) 1.48% 1.57% 1.91% 2.22% 2.38% 2.44% 2.56% Equity/ assets 9% 9% 9% 9% 11% 12% 12%Leverage 10.6 11.3 11.5 11.0 9.4 8.4 8.3 RWA/ assets 43% 46% 49% 55% 61% 63% 66%Common equity to RWAs 22.10% 19.29% 17.69% 16.51% 17.46% 18.71% 18.31% Ave int earn assets/ ave assets 85% 82% 88% 86% 86% 84% 84%Bal sheet risk (RWA/ assets) 42.88% 45.73% 49.26% 54.98% 61.07% 63.47% 65.63% Ave int bearing liabs/ ave liabs 89% 89% 92% 91% 92% 92% 92%ROE (cash) 15.6% 17.8% 21.9% 24.4% 22.3% 20.5% 21.3% Loans/ assets 43% 49% 50% 54% 55% 58% 61%Underlying profit'ty (assets) 2.7% 3.1% 3.3% 4.0% 3.9% 4.0% 4.2% Loans/ deposits 56% 60% 62% 67% 72% 75% 79%Underlying profit'ty (equity) 28.6% 35.1% 37.8% 43.2% 36.4% 33.3% 34.4% Securities & Bills / assets 37% 32% 28% 23% 18% 15% 11%Underlying profit'ty (RWAs) 6.3% 6.8% 6.7% 7.2% 6.4% 6.3% 6.4%Sh'holder Cash Flow FY07 FY08 FY09 FY10 FY11e FY12e FY13e NPLs/ loans 8.93% 5.37% 3.00% 2.25% 2.60% 2.90% 2.85%Adj (cash) earnings 4,346 5,313 7,155 9,218 11,481 13,983 16,993 Provision cover 115% 139% 231% 233% 174% 138% 118%Sh'holder CF (post RWA growth) 1,178 (270) 3,571 (1,195) 214 4,154 4,902 Loan Loss / Gross Loans 1.79% 2.09% 0.68% 1.23% 1.20% 1.30% 1.30%Payout Ratio (Sh'holder profit) 332.0% -839.1% 70.4% -231.5% 1713.6% 107.7% 110.9% VALUATION FY07 FY08 FY09 FY10 FY11e FY12e FY13e

Price/ adj earnings 33.6 27.6 20.5 15.9 13.5 11.7 9.6Loan Yield 10.52% 10.56% 11.57% 11.45% 0.00% 0.00% 0.00% Price/ book 5.0 4.8 4.2 3.5 2.5 2.2 1.8Asset Yield 9.36% 9.58% 9.57% 9.36% 9.25% 9.42% 9.76% Price/ NTA 5.0 4.8 4.2 3.6 2.5 2.2 1.9Cost of Deposits 4.62% 4.37% 4.77% 3.82% 3.38% 3.32% 3.31% Dividend yield 1.6% 1.7% 1.9% 2.5% 2.2% 2.7% 3.3%Cost of Funds 4.72% 4.39% 4.83% 3.93% 3.91% 3.96% 4.09% Free cash flow yield 0.8% -0.2% 2.4% -0.8% 0.1% 2.5% 3.0%Spread 4.64% 5.20% 4.74% 5.43% 5.34% 5.46% 5.66% INTERIMS 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11Return on Free Funds 0.24% 0.03% 0.22% 0.13% 0.16% 0.14% 0.14% Net interest income 3,865 4,340 4,634 4,735 5,365 5,435 5,135Net Interest Margin (MS calc) 4.88% 5.22% 4.96% 5.57% 5.50% 5.60% 5.80% Non interest income 1,615 1,935 1,410 2,088 2,304 3,065 3,946Net Interest Margin (reported) 5.20% 5.48% 5.19% 5.39% 0.00% 0.00% 0.00% Total income 5,480 6,275 6,045 6,823 7,670 8,500 9,081

Opertaing expenses 2,627 3,057 2,652 2,955 3,186 3,551 3,247Interest exp/ int inc 47.8% 45.5% 48.2% 40.6% 40.6% 40.6% 40.6% Underlying profit 2,853 3,218 3,392 3,868 4,484 4,948 5,834Non int inc/ total inc 25.0% 27.4% 28.8% 30.5% 31.2% 30.6% 29.7% Loan loss 442 (420) 691 1,167 1,366 (268) 832Trading Profits/ total inc n.a. n.a. n.a. n.a. n.a. n.a. n.a. Goodwill 0 0 0 0 0 0 0Ave headcount 21,347 22,020 22,659 24,073 25,236 25,236 25,236 Associates/ other 209 65 32 130 (17) 90 34Personnel cost/ headcount (Rp mn) 189 204 212 217 259 284 321 Profit pre tax 2,621 3,703 2,732 2,832 3,101 5,307 5,037Profit/ headcount (Rp mn) 201 237 312 365 455 554 673 Reported NPAT 1,700 2,554 2,019 2,125 2,311 2,914 3,871Cost/ Income 50.8% 47.2% 46.0% 42.5% 42.9% 40.9% 39.6% NPAT attributable 1,693 2,536 2,003 2,111 2,271 2,833 3,780Effective tax rate 31.4% 34.1% 33.5% 32.9% 22.5% 20.0% 20.0% Adj (cash) earnings 1,693 2,536 2,003 2,111 2,271 2,833 3,780 Source: Company Reports e = Morgan Stanley Research estimates

12



Risk-Reward Snapshot: PT Bank Mandiri (BMRI.JK, Rp7,000, OW, PT Rp7,850)

Risk-Reward View: Skewed to the Upside

WARNINGDONOTEDIT_RRS4RL~BMRI.JK~

Rp7,850 (+12%)Rp 7,000

Rp5,204 (-26%)

Rp10,270 (+47%)

0

2,000

4,000

6,000

8,000

10,000

12,000


Rp


Price Target Rp7,850

We derive our valuations from a three-stage Gordon growth model. For our price target, we assign 60% probability to our base-case valuation, 35% to our bull case, and 5% to our bear case.

Bull Case Rp10,270


Stable inflation and increased infrastructure investment: Inflation remains controlled, requiring limited policy response. LandAcquisition Act passes, resulting in increased infrastructure spend and 8% GDP growth. Mandiri increases loan growth to 25% CAGR.

Base Case Rp6,615


Stable inflation outlook, patchy investment in infrastructure: Inflation remains controlled, requiring limited policy response. Infrastructure investment subject to blockages, GDP growth limitedto 6.5% p.a. Mandiri grows loans at 20% CAGR.

Bear Case Rp5,204


Rising inflation, no progress in infrastructure investment: Inflation spikes in 2H11, resulting in higher interest rates and a lossof confidence in the economy. Limited progress in infrastructure spend. GDP growth falls below 6%. Mandiri expands loans at 15%.


Mandiri Bear to Bull Case

5,204 5,5856,615

8,591

10,270381

1,030

1,976

1,679

7,850

-

2,000

4,000

6,000

8,000

10,000

Bear @8.5% RR


RR

Bear @7.4% RR


Base @7.4% RR


Bull @ 7.4%RR


Bull @ 6.0%RR

Pric

e Ta

rget

TP:

Investment Thesis: Why OW • We expect Bank Mandiri, together with

BNI, to deliver the strongest NPAT growth in the industry during 2010-2015, largely as a result of margin expansion – and we believe this is not in the price.

• In addition, we do not think the market fully appreciates the improvements that Mandiri has made to its franchise. Its funding costs have already shown the biggest improvement in the industry, and we now expect a pickup in risk-adjusted asset yields.

• Our price target implies 12% upside for Mandiri. This compares well with other banks in Indonesia (ex. BRI), supporting our Overweight rating.

Key Value Drivers

• The main drivers are NIM expansion and credit charges. Each 10bps of NIM expansion would add c.2.3% to EPS. Each 10bps in credit charges would reduce earnings by 1.8%.

Potential Catalysts

• Parliament passes the Land Acquisition Act, and implements laws allowing state-owned banks to restructure loans. NIM begins to recover in 2012e and/or NPLs in the SME book begin to fall.

Where Could We Be Wrong?

• Benefits of increased loan to deposit ratio and switch into higher margin loans is offset by continued competitive pressure on loans.

• Higher-than-expected inflation and a more rapid tightening of monetary policy could result in higher loan losses, which would cause Mandiri to disappoint.


13



Mandiri Valuation Model We use a three-stage Gordon growth model, which sums the NPV of 10 years of explicit dividend forecasts, 10 years of implicit dividend forecasts, and forecast terminal BV to derive our base case valuation. We then set our price target by assigning 60% probability to our base case valuation, 35%

probability to our bull case and 5% probability to our bear case (see previous page for scenario valuations). On a base case valuation of Rp 6,615, we arrive at a final price target of Rp7,850 for Mandiri.

Exhibit 15 Mandiri 3-Stage Gordon Growth Model Assumptions

Risk Premium 3.50%Risk Free Rate 7.40%Beta 1.09CoE, k 11.2%Sustainable RoE, r 11.2%Payout Ratio 73.5%Sustainable Growth rate, g 3.0%(r - g) / (k - g) 1.00Current Price (Rp) 7,000Fair Value (Rp) 6,615 7800Upside -6%

BMRI DPS (Rp) EPS (Rp) Payout Ratio RoTE Sus. Growth CoE NTAPS (Rp)2010 175 439 40% 22% 13% 11.2% 1,9662011e 157 518 30% 19% 13% 11.2% 2,7632012e 192 599 32% 19% 13% 11.2% 3,2242013e 233 728 32% 19% 13% 11.2% 3,7822014e 275 860 32% 19% 13% 11.2% 4,4252015e 288 901 32% 18% 12% 11.2% 5,0682016e 247 773 32% 14% 9% 11.2% 5,5712017e 218 681 32% 11% 8% 11.2% 6,0252018e 385 1,204 32% 17% 12% 11.2% 7,0342019e 477 1,490 32% 18% 12% 11.2% 8,1632020e 526 1,752 30% 19% 13% 11.2% 9,466NPV of forecast dividends 1,756

2021e 561 1,752 32% 19.0% 12.9% 11.2% 10,6582022e 668 2,024 33% 18.5% 12.4% 11.2% 12,0142023e 798 2,217 36% 17.5% 11.2% 11.2% 13,4332024e 914 2,344 39% 16.0% 9.7% 11.2% 14,8632025e 948 2,371 40% 15.0% 9.0% 11.2% 16,2852026e 1,050 2,443 43% 14.0% 8.0% 11.2% 17,6782027e 1,138 2,475 46% 12.0% 6.5% 11.2% 19,0142028e 1,141 2,282 50% 10.0% 5.0% 11.2% 20,1552029e 1,209 2,015 60% 8.0% 3.2% 11.2% 20,9612030e 1,174 1,677 70% 6.5% 2.0% 11.2% 21,464NPV of yr 11-20 dividends 2,010NPV of Terminal Value 2,84812 mth price target 6,61512 mth upside -6%plus yield on dividends paid before 2011 2%12 mth TSR -4%


14



BNI: Financial Summary PROFIT & LOSS STATEMENT FY07 FY08 FY09 FY10 FY11e FY12e FY13e BALANCE SHEET FY07 FY08 FY09 FY10 FY11e FY12e FY13eNet interest income 7,085 9,442 10,584 11,721 12,569 14,431 16,536 Cash 3,259 4,428 4,903 5,481 6,231 6,937 7,745Non interest income 4,512 4,019 4,844 7,061 7,716 8,747 10,478 Securities & Bills 53,223 45,054 50,914 46,610 48,708 43,352 37,718Total income 11,597 13,461 15,428 18,782 20,285 23,178 27,015 Due from banks 33,643 34,020 45,310 53,295 58,945 67,787 76,158Operating expenses 7,626 7,228 7,991 9,643 10,054 10,728 11,542 Gross loans 88,651 111,994 120,843 136,357 160,394 195,771 236,882Underlying profit 3,971 6,233 7,437 9,139 10,231 12,450 15,473 Provisions 5,436 5,652 6,920 6,957 7,452 8,457 9,263Loan loss 2,704 4,359 4,051 3,629 3,342 4,073 4,673 Net loans 83,215 106,342 113,923 129,400 152,942 187,314 227,619Goodwill 0 0 0 0 0 0 0 Intangibles 0 0 0 0 74 70 67Associates/ Other 213 58 58 (24) 2 2 2 Other 10,001 11,897 12,447 13,795 16,457 18,600 20,646Net profit pre tax 1,481 1,932 3,444 5,486 6,891 8,379 10,802 Total assets 183,342 201,741 227,497 248,581 283,357 324,059 369,953Income tax 579 706 957 1,382 1,551 1,676 2,160 Deposits 147,389 164,224 189,578 194,375 223,295 256,888 293,762Net profit post tax 902 1,226 2,487 4,104 5,341 6,703 8,642 Due to banks 3,804 4,100 3,819 3,380 3,042 3,042 3,437Minorities 4 3 3 1 3 3 4 Debt 7,243 8,617 5,570 5,570 5,292 5,292 5,821Reported profit 898 1,222 2,484 4,102 5,338 6,700 8,638 Other 7,658 9,338 9,355 12,107 14,590 16,599 18,066Preference divs - - - - - - - Total liabilities 166,094 186,279 208,322 215,432 246,218 281,821 321,085NPAT attributable 898 1,222 2,484 4,102 5,338 6,700 8,638 Net Assets 17,247 15,462 19,175 33,149 37,139 42,239 48,868Adj (cash) earnings 898 1,222 2,484 4,102 5,338 6,700 8,638 Common equity 13,554 13,602 13,407 23,623 23,507 23,507 23,507

Hybrid/ pref 0 0 0 0 0 0 0Reported EPS 63 80 163 266 286 359 463 Retained earnings 2,039 2,597 4,662 7,366 11,418 16,449 22,991- growth -57% 27% 103% 64% 8% 26% 29% Reserves 1,626 (768) 1,074 2,131 2,184 2,251 2,337Adj (cash) EPS 63 80 163 266 286 359 463 Equity attributable 17,220 15,431 19,144 33,120 37,109 42,207 48,835- growth -57% 27% 103% 64% 8% 26% 29% OEI 28 31 31 30 31 32 33Ordinary DPS 29 8 57 66 86 108 139 Total equity 17,247 15,462 19,175 33,150 37,139 42,239 48,868Ordinary pay out ratio 47% 10% 35% 25% 30% 30% 30% Ord share outstanding (bn shares) 15 15 15 19 19 19 19Special DPS - - - - - - - Fully diluted weighted ave (bn shares) 14 15 15 15 19 19 19Returns Analysis FY07 FY08 FY09 FY10 FY11e FY12e FY13e Book value per share 1,127 1,010 1,253 1,776 1,990 2,263 2,619Net interest yield 4.23% 5.15% 5.19% 4.92% 4.73% 4.75% 4.77% NTA per share 1,127 1,010 1,253 1,776 1,986 2,259 2,615Net interest margin 5.05% 6.32% 5.96% 5.78% 5.78% 5.80% 5.80%Ave int earn assets/ ave assets 83.92% 81.42% 87.08% 85.25% 81.76% 81.92% 82.16% Ave int earn assets (reported) 149,648 158,337 185,237 202,781 217,456 248,810 285,110Cash non-interest yield 2.34% 1.84% 2.00% 2.97% 2.90% 2.88% 3.02% - growth 5.3% 5.8% 17.0% 9.5% 7.2% 14.4% 14.6%Operating exp/ assets 4.32% 3.75% 3.72% 4.05% 3.78% 3.53% 3.33% Ave int bearing liabs 155,726 157,555 182,256 196,480 222,487 255,670 292,889Loan loss/ assets 1.53% 2.26% 1.89% 1.52% 1.26% 1.34% 1.35% - growth 14.2% 1.2% 15.7% 7.8% 13.2% 14.9% 14.6%Loan loss/ RWA 2.74% 3.67% 3.02% 2.43% 1.82% 1.77% 1.69% RWAs 109,269 128,420 140,214 158,409 208,905 251,260 300,289RWA/ assets 56.02% 61.72% 62.58% 62.73% 69.05% 75.76% 79.47% - growth 23.7% 17.5% 9.2% 13.0% 31.9% 20.3% 19.5%Pretax ROA 0.72% 0.97% 1.58% 2.31% 2.59% 2.76% 3.11% Growth in average loans 20.1% 29.4% 16.0% 10.5% 15.4% 20.0% 21.5%Tax effect (tax/ assets) 0.28% 0.36% 0.44% 0.58% 0.58% 0.55% 0.62% Equity tier 1 11.7% 9.8% 10.3% 16.6% 15.1% 14.5% 14.2%Effective tax rate 39.12% 36.56% 27.79% 25.20% 22.50% 20.00% 20.00% Tier 1 11.7% 9.8% 10.3% 16.6% 15.1% 14.5% 14.2%Associate/ other yield 0.07% 0.02% 0.02% -0.01% 0.00% 0.00% 0.00% Total CAR 15.7% 13.5% 13.8% 18.6% 17.1% 16.3% 15.9%ROA (cash) 0.51% 0.64% 1.16% 1.72% 2.01% 2.21% 2.49% Equity/ assets 9% 8% 8% 11% 13% 13% 13%Leverage 11.0 11.8 12.4 9.1 7.6 7.7 7.6 RWA/ assets 56% 62% 63% 63% 69% 76% 79%Common equity to RWAs 16.20% 13.74% 12.87% 17.50% 19.12% 17.24% 16.51% Ave int earn assets/ ave assets 84% 81% 87% 85% 82% 82% 82%Bal sheet risk (RWA/ assets) 56.02% 61.72% 62.58% 62.73% 69.05% 75.76% 79.47% Ave int bearing liabs/ ave liabs 97% 89% 92% 93% 96% 97% 97%ROE (cash) 5.6% 7.5% 14.4% 15.7% 15.2% 16.9% 19.0% Loans/ assets 48% 56% 53% 55% 57% 60% 64%Underlying profit'ty (assets) 2.3% 3.2% 3.5% 3.8% 3.8% 4.1% 4.5% Loans/ deposits 60% 68% 64% 70% 72% 76% 81%Underlying profit'ty (equity) 24.8% 38.1% 42.9% 34.9% 29.1% 31.4% 34.0% Securities & Bills / assets 29% 22% 22% 19% 17% 13% 10%Underlying profit'ty (RWAs) 4.0% 5.2% 5.5% 6.1% 5.6% 5.4% 5.6%Sh'holder Cash Flow FY07 FY08 FY09 FY10 FY11e FY12e FY13e NPLs/ loans 8.53% 5.00% 4.77% 4.28% 3.80% 3.50% 3.30%Adj (cash) earnings 898 1,932 2,484 4,102 5,338 6,700 8,638 Provision cover 72% 101% 120% 122% 122% 123% 118%Sh'holder CF (post RWA growth) (2,239) (940) 715 1,373 (2,237) 346 1,284 Loan Loss / Gross Loans 3.05% 3.89% 2.70% 2.85% 2.00% 2.00% 1.90%Payout Ratio (Sh'holder profit) -20.1% -13.0% 121.6% 89.6% -71.6% 580.5% 201.9% VALUATION FY07 FY08 FY09 FY10 FY11e FY12e FY13e

Price/ adj earnings 59.6 46.9 23.1 14.1 13.1 10.4 8.1Loan Yield 11.30% 11.18% 11.95% 11.41% 0.00% 0.00% 0.00% Price/ book 3.3 3.7 3.0 2.1 1.9 1.7 1.4Asset Yield 10.02% 10.57% 10.40% 9.28% 9.29% 9.32% 9.32% Price/ NTA 3.3 3.7 3.0 2.1 1.9 1.7 1.4Cost of Deposits 4.69% 4.02% 4.49% 3.56% 3.44% 3.37% 3.36% Dividend yield 0.8% 0.2% 1.5% 1.8% 2.3% 2.9% 3.7%Cost of Funds 4.73% 4.23% 4.55% 3.62% 3.43% 3.43% 3.43% Free cash flow yield -3.9% -1.6% 1.2% 2.0% -3.2% 0.5% 1.8%Spread 5.29% 6.34% 5.84% 5.66% 5.86% 5.89% 5.89% INTERIMS 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11Return on Free Funds -0.25% -0.02% 0.11% 0.11% -0.08% -0.09% -0.09% Net interest income 2,633 2,684 3,057 2,995 3,114 2,716 2,891Net Interest Margin (MS calc) 5.05% 6.32% 5.96% 5.78% 5.78% 5.80% 5.80% Non interest income 1,194 1,289 1,378 1,210 817 3,657 1,485Net Interest Margin (reported) 4.99% 6.26% 6.01% 5.78% 0.00% 0.00% 0.00% Total income 3,826 3,972 4,435 4,205 3,930 6,373 4,376

Opertaing expenses 2,149 2,283 2,104 2,433 1,930 3,176 1,945Interest exp/ int inc 51.0% 41.4% 43.9% 37.8% 37.8% 37.8% 37.8% Underlying profit 1,677 1,689 2,331 1,772 2,000 3,197 2,431Non int inc/ total inc 38.9% 29.9% 31.4% 37.6% 38.0% 37.7% 38.8% Loan loss 928 568 728 504 519 1,878 694Trading Profits/ total inc n.a. n.a. n.a. n.a. n.a. n.a. n.a. Goodwill 0 0 0 0 0 0 0Ave headcount 18,718 18,176 18,254 18,895 19,315 19,315 19,315 Associates/ other 21 (20) (84) (33) 124 (31) (61)Personnel cost/ headcount (Rp mn) 202 183 187 214 224 236 250 Profit pre tax 770 1,102 1,519 1,234 1,606 1,288 1,676Profit/ headcount (Rp mn) 49 68 134 212 276 347 447 Reported NPAT 687 632 1,188 960 918 1,199 1,255Cost/ Income 65.8% 53.7% 51.8% 51.3% 49.6% 46.3% 42.7% NPAT attributable 689 630 1,187 959 918 1,199 1,253Effective tax rate 39.1% 36.6% 27.8% 25.2% 22.5% 20.0% 20.0% Adj (cash) earnings 689 630 1,187 959 918 1,199 1,253 Source: Company Reports E = Morgan Stanley Research Estimates

15



Risk-Reward Snapshot: BNI (BBNI.JK, Rp3,750, EW, PT Rp4,000) Risk-Reward View: Fast EPS Growth Offset by Slower Asset Growth

WARNINGDONOTEDIT_RRS4RL~BBNI.JK~

Rp4,000 (+7%)Rp 3,750

Rp2,512 (-33%)

Rp5,393 (+44%)

0

1,000

2,000

3,000

4,000

5,000

6,000


Rp


Price Target Rp4,000 We derive our valuations from a three-stage Gordon growth model, Our price target assigns 60% probability to our base-case value, 35% to our bull case, and 5% to our bear case.

Bull Case Rp5,393


Stable inflation and increased infrastructure investment: Inflation remains controlled, requiring limited policy response. LandAcquisition Act passes, resulting in increased infrastructure spend and 8% GDP growth. BNI increases loan growth to 23% CAGR.

Base Case Rp3,346


Stable inflation outlook, patchy investment in infrastructure: Inflation remains controlled, requiring limited policy response. Infrastructure investment subject to blockages, GDP growth limitedto 6.5% p.a. BNI grows loans at 19% CAGR.

Bear Case Rp2,512


Rising inflation, no progress in infrastructure investment: Inflation spikes in 2H11, resulting in higher interest rates and a lossof confidence in the economy. Limited progress in infrastructure spend. GDP growth falls below 6%. BNI expands lending at 15%.


BNI Bear to Bull Case

2,512 2,6793,346

4,519

5,393

874

1,173

666

168

4,000

-

1,000

2,000

3,000

4,000

5,000

6,000

Bear @8.5% RR


RR

Bear @7.4% RR


Base @7.4% RR


Bull @ 7.4%RR


Bull @ 6.0%RR

Price

Targ

et

TP:

Investment Thesis: Why EW

• With a cleaner loan book, RoAA and RoAE look set to improve, having been low historically. In addition, BNI should produce the industry’s fastest EPS growth over the next five years.

• However, the P/E already reflects this faster growth, in our view, especially after adjusting for loan recoveries. We believe that BNI’s weaker franchise, will lead to lower returns, resulting in the group posting slower asset growth than peers.

• Our probability-weighted price target of Rp4,000 is just 7% ahead of the current share price.

Key Value Drivers

• The main drivers are loan growth and credit charges. Each 1% additional loan growth would add 1.2% to EPS. Each 10bps in credit charges would reduce earnings by 3%.

Potential Catalysts

• Catalysts to the downside include a pickup in core inflation in 2H11. Catalysts to the upside include Parliament passing the Land Acquisition Act, and laws allowing state-owned banks to restructure loans.

Where Could We Be Wrong?

• If BNI is successful in its efforts to provide market-leading service and products, it could develop a business with intrinsically higher returns. This would lead us to raise our price target.

• Higher-than-expected inflation and a more rapid tightening of monetary policy could result in higher loan losses, which would cause BNI to disappoint.


16



BNI Valuation ModelWe use a three-stage Gordon growth model, which sums the NPV of 10 years of explicit dividend forecasts, 10 years of implicit dividend forecasts, and forecast terminal BV to derive our base case valuation. We then set our price target by assigning 60% probability to our base case valuation, 35%

probability to our bull case and 5% probability to our bear case (see previous page for scenario valuations). On a base case valuation of Rp 3,346, we arrive at a final price target of Rp4,000 for BNI.

Exhibit 16 BNI 3-Stage Gordon Growth Model Assumptions

Risk Premium 3.50%Risk Free Rate 7.40%Beta 1.12CoE, k 11.3%Sustainable RoE, r 11.3%Payout Ratio 73.5%Sustainable Growth rate, g 3.0%(r - g) / (k - g) 1.00Current Price (Rp) 3,750Fair Value (Rp) 3,346 4000Upside -11%

BNI DPS (Rp) EPS (Rp) Payout Ratio RoTE Sus. Growth CoE NTAPS (Rp)2010 66 266 25% 15% 11% 11.3% 1,7762011e 86 286 30% 14% 10% 11.3% 1,9862012e 108 359 30% 16% 11% 11.3% 2,2592013e 139 463 30% 18% 12% 11.3% 2,6152014e 153 510 30% 17% 12% 11.3% 2,9862015e 173 578 30% 17% 12% 11.3% 3,4112016e 148 492 30% 13% 9% 11.3% 3,7302017e 121 404 30% 10% 7% 11.3% 3,9872018e 174 580 30% 13% 9% 11.3% 4,4462019e 216 722 30% 14% 10% 11.3% 4,9932020e 252 840 30% 15% 10% 11.3% 5,617NPV of forecast dividends 939

2021e 252 840 30% 16.0% 11.2% 11.3% 6,2052022e 298 993 30% 17.0% 11.9% 11.3% 6,9002023e 352 1,173 30% 15.0% 10.5% 11.3% 7,7212024e 347 1,158 30% 13.0% 9.1% 11.3% 8,5312025e 388 1,109 35% 12.0% 7.8% 11.3% 9,2522026e 444 1,110 40% 11.0% 6.6% 11.3% 9,9192027e 491 1,091 45% 10.0% 5.5% 11.3% 10,5192028e 526 1,052 50% 9.0% 4.5% 11.3% 11,0452029e 596 994 60% 8.0% 3.2% 11.3% 11,4422030e 641 915 70% 6.5% 2.0% 11.3% 11,717NPV of yr 11-20 dividends 880NPV of Terminal Value 1,52712 mth price target 3,34612 mth upside -11%plus yield on dividends paid before 2011 2%12 mth TSR -9%


17



BCA: Financial Summary PROFIT & LOSS STATEMENT FY07 FY08 FY09 FY10 FY11e FY12e FY13e BALANCE SHEET FY07 FY08 FY09 FY10 FY11e FY12e FY13eNet interest income 9,029 11,676 14,051 12,937 15,345 17,669 19,867 Cash 7,676 10,799 8,865 9,639 7,745 4,864 4,983Non interest income 3,392 4,559 5,151 5,560 6,829 8,172 9,640 Securities & Bills 94,963 94,110 115,321 68,983 73,359 74,227 65,308Total income 12,421 16,234 19,202 18,497 22,173 25,842 29,507 Due from banks 27,567 22,514 29,344 84,563 91,159 99,363 109,300Operating expenses 5,884 6,810 8,471 9,556 10,525 11,939 13,730 Gross loans 83,736 114,194 125,804 154,341 191,537 237,889 294,744Underlying profit 6,537 9,424 10,731 8,941 11,649 13,902 15,777 Provisions 1,686 2,757 4,306 3,906 3,416 3,567 3,788Loan loss 210 1,741 2,258 323 242 403 488 Net loans 82,050 111,436 121,498 150,434 188,121 234,322 290,956Goodwill 0 0 0 0 0 0 0 Intangibles 0 0 0 107 107 107 107Associates/ Other 75 36 472 2,036 493 497 504 Other 5,750 6,711 7,364 10,692 12,011 13,229 14,590Net profit pre tax 6,402 7,720 8,945 10,653 11,900 13,996 15,794 Total assets 218,005 245,570 282,392 324,419 372,502 426,112 485,244Income tax 1,912 1,944 2,138 2,174 2,380 2,799 3,159 Deposits 189,172 209,529 245,140 278,087 320,079 365,210 414,878Net profit post tax 4,489 5,776 6,807 8,479 9,520 11,197 12,635 Due to banks 2,065 4,048 2,489 2,908 2,617 2,748 3,050Minorities 0 0 0 0 0 0 0 Debt 1,084 448 730 439 593 741 874Reported profit 4,489 5,776 6,807 8,479 9,520 11,197 12,635 Other 5,242 8,265 6,177 8,877 9,704 10,515 11,386Preference divs - - - - - - - Total liabilities 197,563 222,291 254,536 290,311 332,992 379,213 430,189NPAT attributable 4,489 5,776 6,807 8,479 9,520 11,197 12,635 Net Assets 20,442 23,280 27,857 34,108 39,510 46,899 55,055Adj (cash) earnings 4,489 5,776 6,807 8,479 9,520 11,197 12,635 Common equity 20,442 23,279 27,857 34,108 39,510 46,899 55,055

Hybrid/ pref 0 0 0 0 0 0 0Reported EPS IDR 183 IDR 235 IDR 278 IDR 348 IDR 391 IDR 460 IDR 519 Retained earnings 13,513 17,946 22,195 28,068 34,196 41,585 49,741- growth 6.0% 28.7% 18.3% 25.1% 12.3% 17.6% 12.8% Reserves (13,513) (17,946) (22,195) (28,068) (34,196) (41,585) (49,741)Adj (cash) EPS IDR 183 IDR 235 IDR 278 IDR 347 IDR 389 IDR 458 IDR 516 Equity attributable 20,442 23,279 27,857 34,108 39,510 46,899 55,055- growth 6.0% 28.7% 18.3% 24.6% 12.3% 17.6% 12.8% OEI 0 0 0 0 0 0 0Ordinary DPS IDR 98 IDR 104 IDR 113 IDR 139 IDR 156 IDR 184 IDR 130 Total equity 20,442 23,279 27,857 34,108 39,510 46,899 55,055Ordinary pay out ratio 54% 44% 40% 40% 40% 40% 25% Ord share outstanding 25 25 24 24 24 24 24Special DPS - - - - - - - Fully diluted weighted ave 25 25 24 24 24 24 24Returns Analysis FY07 FY08 FY09 FY10 FY11e FY12e FY13e Book value per share IDR 832 IDR 948 IDR 1,143 IDR 1,400 IDR 1,622 IDR 1,925 IDR 2,260Net interest yield 4.6% 5.0% 5.3% 4.3% 4.4% 4.4% 4.4% NTA per share IDR 832 IDR 948 IDR 1,143 IDR 1,395 IDR 1,617 IDR 1,920 IDR 2,255Net interest margin 4.88% 5.40% 5.69% 4.54% 4.67% 4.65% 4.55%Ave int earn assets/ ave assets 93.8% 93.3% 93.6% 94.0% 94.2% 95.2% 95.8% Ave int earn assets 185,189 216,320 247,112 285,072 328,310 380,275 436,738Cash non-interest yield 1.7% 2.0% 2.0% 1.8% 2.0% 2.0% 2.1% - growth 20.4% 16.8% 14.2% 15.4% 15.2% 15.8% 14.8%Operating exp/ assets 3.0% 2.9% 3.2% 3.1% 3.0% 3.0% 3.0% Ave int bearing liabs 176,597 207,484 235,521 268,496 306,369 350,646 399,068Loan loss/ assets 0.1% 0.8% 0.9% 0.1% 0.1% 0.1% 0.1% - growth 21.6% 17.5% 13.5% 14.0% 14.1% 14.5% 13.8%Loan loss/ RWA 0.22% 1.32% 1.52% 0.16% 0.10% 0.14% 0.14% RWAs 96,706 132,277 148,968 205,349 247,205 298,142 359,448RWA/ assets 49% 57% 56% 68% 71% 75% 79% - growth 31.5% 36.8% 12.6% 37.8% 20.4% 20.6% 20.6%Pretax ROA 3.20% 3.32% 3.21% 2.84% 3.27% 3.38% 3.36% Growth in average loans 24.7% 35.4% 21.3% 16.7% 23.5% 24.2% 24.0%Tax effect (tax/ assets) 0.96% 0.83% 0.77% 0.58% 0.65% 0.68% 0.67% Equity tier 1 17.7% 15.3% 14.5% 12.6% 11.9% 11.9% 11.6%Effective tax rate 29.9% 25.2% 23.9% 20.4% 20.0% 20.0% 20.0% Tier 1 17.7% 15.3% 14.5% 12.6% 11.9% 11.9% 11.6%Associate/ other yield 0.0% 0.0% 0.1% 0.5% 0.1% 0.1% 0.1% Total CAR 19.2% 15.8% 15.3% 13.5% 13.0% 12.9% 12.7%ROA (cash) 2.27% 2.49% 2.58% 2.79% 2.73% 2.80% 2.77% Equity/ assets 9% 9% 10% 11% 11% 11% 11%Leverage 10.3 10.6 10.3 9.8 9.5 9.2 8.9 RWA/ assets 44% 54% 53% 63% 66% 70% 74%Common equity to RWAs 19.9% 16.5% 17.2% 15.1% 14.9% 14.5% 14.2% Ave int earn assets/ ave assets 94% 93% 94% 94% 94% 95% 96%Bal sheet risk (RWA/ assets) 49% 57% 56% 68% 71% 75% 79% Ave int bearing liabs/ ave liabs 99% 99% 99% 99% 98% 98% 99%ROE (cash) 23.3% 26.4% 26.6% 27.4% 25.9% 25.9% 24.8% Loans/ assets 38% 47% 45% 48% 51% 56% 61%Underlying profit'ty (assets) 3.3% 4.1% 4.1% 2.9% 3.3% 3.5% 3.5% Loans/ deposits 44% 55% 51% 56% 60% 65% 71%Underlying profit'ty (equity) 33.9% 43.1% 42.0% 28.9% 31.6% 32.2% 30.9% Securities & Bills / assets 44% 38% 41% 21% 20% 17% 13%Underlying profit'ty (RWAs) 7.7% 8.2% 7.6% 5.0% 5.1% 5.1% 4.8%

NPLs/ loans 1% 1% 1% 1% 1% 1% 1%Sh'holder Cash Flow FY07 FY08 FY09 FY10 FY11e FY12e FY13e Provision cover 252% 409% 477% 395% 297% 250% 192%Adj (cash) earnings 4,489 5,776 6,807 8,479 9,520 11,197 12,635 Loan Loss / Ave. Gross Loans 0.26% 1.80% 1.89% -0.30% 0.09% 0.15% 0.15%Sh'holder CF (post RWA growth) 1,017 440 4,304 22 3,241 3,557 3,439 VALUATION FY07 FY08 FY09 FY10 FY11e FY12e FY13ePayout Ratio (Sh'holder profit) 236% 581% 64% 15373% 117% 126% 92% Price/ adj earnings 38.3 29.8 25.2 20.2 18.0 15.3 13.6

Price/ book 8.4 7.4 6.1 5.0 4.3 3.6 3.1Loan Yield 10.46% 10.63% 11.07% 9.00% 9.40% 9.40% 9.20% Price/ NTA 8.4 7.4 6.1 5.0 4.3 3.6 3.1Asset Yield 8.52% 8.61% 8.94% 7.25% 7.20% 7.15% 6.93% Dividend yield 1.4% 1.5% 1.6% 2.0% 2.2% 2.6% 1.9%Cost of Deposits 3.67% 3.20% 3.30% 0.00% 2.63% 2.64% 2.53% Free cash flow yield 0.6% 0.3% 2.5% 0.0% 1.9% 2.1% 2.0%Cost of Funds 3.82% 3.34% 3.41% 2.88% 2.53% 2.55% 2.45% INTERIMS 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11Spread 4.70% 5.26% 5.53% 4.37% 4.67% 4.60% 4.48% Net interest income 3,180 3,812 2,731 2,872 3,479 3,855 3,847Return on Free Funds 0.18% 0.14% 0.16% 0.17% 0.01% 0.04% 0.07% Non interest income 1,296 1,388 1,216 1,372 1,400 1,573 1,388Net Interest Margin 4.88% 5.40% 5.69% 4.54% 4.67% 4.65% 4.55% Total income 4,476 5,200 3,947 4,243 4,879 5,428 5,235

Opertaing expenses 1,847 2,822 2,544 2,371 2,136 2,504 2,748Interest exp/ int inc 42.8% 37.3% 36.4% 37.4% 35.1% 35.0% 34.4% Underlying profit 2,629 2,379 1,403 1,872 2,743 2,924 2,487Non int inc/ total inc 27.3% 28.1% 26.8% 30.1% 30.8% 31.6% 32.7% Loan loss 546 7 (304) 27 408 192 127Trading Profits/ total inc n.a n.a n.a n.a n.a n.a n.a Goodwill 0 0 0 0 0 0 0Ave headcount 20,455 20,346 20,238 19,930 19,687 19,687 19,687 Associates/ other 223 43 763 752 415 105 174Personnel cost/ headcount (Rp mn) 140 161 207 221 257 295 340 Profit pre tax 2,306 2,415 2,469 2,597 2,750 2,836 2,534Profit/ headcount (Rp mn) 219 284 336 425 484 569 642 Reported NPAT 1,787 1,718 1,931 2,050 2,128 2,370 2,016Cost/ Income 47.4% 41.9% 44.1% 51.7% 47.5% 46.2% 46.5% NPAT attributable 1,787 1,718 1,931 2,050 2,128 2,370 2,016Effective tax rate 29.9% 25.2% 23.9% 20.4% 20.0% 20.0% 20.0% Adj (cash) earnings 1,787 1,718 1,931 2,050 2,128 2,370 2,016 Source: Company Reports E = Morgan Stanley Research Estimates

18



Risk-Reward Snapshot: BCA (BBCA.JK, Rp7,000, EW, PT Rp7,000)

Risk-Reward View: Fairly Valued

WARNINGDONOTEDIT_RRS4RL~BBCA.JK~

Rp7,000 (0%)Rp 7,000

Rp4,664 (-33%)

Rp8,808 (+26%)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000


Rp



Bull Case Rp8,808


Stable inflation and increased infrastructure investment: Inflation remains controlled, requiring limited policy response. Land Acquisition Act passes, resulting in increased infrastructure spend and 8% GDP growth. BCA increases loan growth to 27% CAGR.

Base Case Rp6,139


Stable inflation outlook, patchy investment in infrastructure: Inflation remains controlled, requiring limited policy response. Infrastructure investment subject to blockages, GDP growth limited to 6.5% p.a. BCA grows loans at 21% CAGR.

Bear Case Rp4,664


Rising inflation, no progress in infrastructure investment: Inflation spikes in 2H11, resulting in higher interest rates and a lossof confidence in the economy. Limited progress in infrastructure spend. GDP growth falls below 6%. BCA expands lending at 15%.

Source: Morgan Stanley, FactSet BCA Bear to Bull Case

4,6645,402

6,1397,251

8,808

1,557

1,112

737

738

7,000

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

9,000

10,000

Bear @8.5% RR


RR

Bear @7.4% RR


Base @7.4% RR


Bull @7.4% RR


Bull @6.0% RR

Pric

e Ta

rget

TP:

Investment Thesis: Why EW • We think BCA deservedly trades at a

premium to the rest of the Indonesian bank sector, and to historical ratings.

• However, the easy gains in terms of leveraging the balance sheet and lowering the cost of equity are now complete, in our view.

• This makes it difficult for the stock’s premium rating to widen.

• To add value over the longer term, BCA needs to further lever the balance sheet, but its conservatism will limit its ability to do so, in our view.

Key Value Drivers

• The key driver of value for the Indonesian banks is long-term bond yields. We estimate a 1ppt change in the 10-year bond affects valuation by ~10%.

• Loan growth: At an operational level, we believe loan growth is key. We forecast a 21% 5-year CAGR in lending at BCA.

Potential Catalyst

• Rising policy rates – Given its low LDR, BCA is the bank that should benefit most from rising policy rates.


• Upside risks – Loan growth ends up being higher than forecast as the Indonesian economy remains strong. Risk-free rate moves down to 6%.

• Downside risks – Relative premium eases as EPS growth slows relative to peers.


19



BCA Valuation Model We use a three-stage Gordon growth model, which sums the NPV of 10 years of explicit dividend forecasts, 10 years of implicit dividend forecasts, and forecast terminal BV to derive our base case valuation. We then set our price target by assigning 60% probability to our base case valuation, 35%

probability to our bull case and 5% probability to our bear case valuations (see previous page for scenario valuations). On a base case valuation of Rp 6,139, we arrive at a final price target of Rp7,000 for BCA.

Exhibit 17 BCA 3-Stage Gordon Growth Model Assumptions

Risk Premium 3.50%Risk Free Rate 7.40%Beta 0.97CoE, k 10.8%Sustainable RoE, r 10.8%Payout Ratio 72.0%Sustainable Growth rate, g 3.0%(r - g) / (k - g) 1.00Current Price (Rp) 7,000Fair Value (Rp) 6,139 7,000 Upside/Downside -12%

BCA DPS (Rp) EPS (Rp) Payout Ratio RoE Sus. Growth CoE NTAPS (Rp)2009 113 278 40% 24% 14% 10.8% 1,1432010e 139 347 40% 25% 15% 10.8% 1,3952011e 156 389 40% 24% 14% 10.8% 1,6172012e 184 458 40% 24% 14% 10.8% 1,9202013e 130 516 25% 23% 17% 10.8% 2,2552014e 136 543 25% 20% 15% 10.8% 2,6712015e 125 497 25% 16% 12% 10.8% 3,0342016e 127 505 25% 15% 11% 10.8% 3,4162017e 126 503 25% 13% 10% 10.8% 3,7942018e 185 738 25% 17% 13% 10.8% 4,4092019e 276 1,098 25% 21% 15% 10.8% 5,327NPV of forecast dividends 967

2020e 253 1,098 23% 23% 17.7% 10.8% 6,1722021e 326 1,417 23% 24% 18.5% 10.8% 7,2632022e 415 1,743 24% 25% 19.1% 10.8% 8,5912023e 533 2,148 25% 25% 18.8% 10.8% 10,2062024e 633 2,552 25% 24% 18.0% 10.8% 12,1252025e 713 2,910 25% 23% 17.4% 10.8% 14,3222026e 824 3,294 25% 22% 16.5% 10.8% 16,7932027e 924 3,694 25% 20% 15.0% 10.8% 19,5642028e 978 3,913 25% 18% 13.5% 10.8% 22,4982029e 1,012 4,050 25% 16% 12.0% 10.8% 25,536NPV of yr 11-20 dividends 1,531NPV of Terminal Value 3,64112 mth price target 6,13912 mth upside -12%plus yield on dividends paid before 2011 2%12 mth TSR -10% Source: Morgan Stanley Research Estimates

20



Danamon Financial Summary PROFIT & LOSS STATEMENT FY07 FY08 FY09 FY10 FY11e FY12e FY13e BALANCE SHEET FY07 FY08 FY09 FY10 FY11e FY12e FY13eNet interest income 7,136 8,354 9,462 10,046 12,146 14,239 16,640 Cash 1,238 4,162 2,117 1,985 7,203 8,048 9,623Non interest income 1,358 1,956 1,891 2,790 3,449 4,139 4,967 Securities & Bills 22,007 20,757 18,000 12,411 13,038 13,973 14,036Total income 8,494 10,310 11,352 12,836 15,594 18,378 21,607 Due from banks 8,495 8,987 8,791 16,236 16,777 17,346 15,882Operating expenses 4,315 5,663 5,715 6,307 7,623 9,090 10,679 Gross loans 53,319 66,860 63,234 82,437 99,682 121,268 147,197Underlying profit 4,179 4,647 5,637 6,529 7,971 9,288 10,929 Provisions 1,479 1,573 2,212 2,505 3,438 4,014 4,615Loan loss 1,020 1,819 2,895 2,134 2,464 2,985 3,499 Net loans 51,840 65,287 61,022 79,931 96,244 117,254 142,582Goodwill 83 88 207 0 0 0 0 Intangibles 334 250 1,282 1,576 1,576 1,576 1,576Associates/ Other 238 (62) (164) (394) (433) (473) (535) Other 5,497 7,825 7,386 6,067 6,012 6,048 6,182Net profit pre tax 3,314 2,678 2,371 4,002 5,074 5,830 6,895 Total assets 89,410 107,268 98,598 118,207 140,849 164,245 189,880Income tax 1,044 876 757 1,018 1,269 1,458 1,724 Deposits 57,804 73,969 67,216 79,643 92,386 107,167 124,314Net profit post tax 2,270 1,802 1,614 2,984 3,806 4,373 5,171 Due to banks 4,257 1,471 1,203 1,973 987 1,036 1,150Minorities 153 272 81 100 100 100 100 Debt 4,871 6,314 2,894 2,968 3,091 3,221 3,357Reported profit 2,117 1,530 1,533 2,883 3,705 4,272 5,071 Other 11,308 14,405 11,383 15,014 23,497 29,512 34,816Preference divs - - - - - - - Total liabilities 78,239 96,159 82,696 99,598 119,960 140,936 163,637NPAT attributable 2,117 1,530 1,533 2,883 3,705 4,272 5,071 Net Assets 11,170 11,109 15,902 18,609 20,889 23,309 26,243Adj (cash) earnings 2,034 1,442 1,325 2,883 3,705 4,272 5,071 Common equity 11,170 11,109 15,902 18,609 20,889 23,309 26,243

Hybrid/ pref 0 0 0 0 0 0 0Reported EPS IDR 255 IDR 183 IDR 183 IDR 344 IDR 442 IDR 509 IDR 604 Retained earnings 6,595 6,989 7,742 9,874 12,137 14,557 17,492- growth 57.9% (28.3%) 0.0% 87.7% 28.5% 15.3% 18.7% Reserves (6,932) (7,520) (7,838) (10,033) (12,297) (14,716) (17,651)Adj (cash) EPS IDR 259 IDR 195 IDR 200 IDR 331 IDR 426 IDR 491 IDR 583 Equity attributable 10,833 10,579 15,806 18,450 20,730 23,150 26,084- growth 53.7% (24.7%) 2.5% 65.7% 28.5% 15.3% 18.7% OEI 337 530 96 159 159 159 159Ordinary DPS IDR 126 IDR 92 IDR 91 IDR 172 IDR 221 IDR 255 IDR 302 Total equity 11,170 11,109 15,902 18,609 20,889 23,309 26,243Ordinary pay out ratio 49% 47% 46% 52% 52% 52% 52% Ord share outstanding 8 8 8 8 8 8 8Special DPS - - - - - - - Fully diluted weighted ave 8 8 9 9 9 9 9Returns Analysis FY07 FY08 FY09 FY10 FY11e FY12e FY13e Book value per share IDR 1,295 IDR 1,266 IDR 1,884 IDR 2,199 IDR 2,471 IDR 2,759 IDR 3,109Net interest yield 8.3% 8.5% 9.2% 9.3% 9.4% 9.3% 9.4% NTA per share IDR 1,255 IDR 1,236 IDR 1,731 IDR 2,011 IDR 2,283 IDR 2,571 IDR 2,921Net interest margin 8.98% 9.42% 10.35% 10.23% 10.35% 10.37% 10.37%Ave int earn assets/ ave assets 92.6% 90.2% 88.8% 90.6% 90.6% 90.0% 90.7% Ave int earn assets 79,420 88,686 91,422 98,196 117,319 137,316 160,537Cash non-interest yield 1.6% 2.0% 1.8% 2.6% 2.7% 2.7% 2.8% - growth 13.8% 11.7% 3.1% 7.4% 19.5% 17.0% 16.9%Operating exp/ assets 5.0% 5.8% 5.6% 5.8% 5.9% 6.0% 6.0% Ave int bearing liabs 72,186 83,568 85,770 86,828 104,819 125,489 147,327Loan loss/ assets 1.2% 1.8% 2.8% 2.0% 1.9% 2.0% 2.0% - growth 13.6% 15.8% 2.6% 1.2% 20.7% 19.7% 17.4%Loan loss/ RWA 1.60% 2.56% 4.56% 2.44% 2.04% 2.09% 2.08% RWAs 63,821 70,983 63,559 87,594 120,981 142,731 168,430RWA/ assets 74% 72% 62% 81% 93% 94% 95% - growth 18.6% 11.2% (10.5%) 37.8% 38.1% 18.0% 18.0%Pretax ROA 3.68% 2.88% 2.66% 4.05% 4.25% 4.13% 4.20% Growth in average loans 20.8% 24.8% 8.3% 12.0% 25.0% 21.3% 21.5%Tax effect (tax/ assets) 1.16% 0.94% 0.85% 1.03% 1.06% 1.03% 1.05% Equity tier 1 15.3% 13.4% 17.5% 13.2% 14.0% 13.3% 12.8%Effective tax rate 31.5% 32.7% 31.9% 25.4% 25.0% 25.0% 25.0% Tier 1 15.3% 13.4% 17.5% 13.2% 14.0% 13.3% 12.8%Associate/ other yield 0.2% 0.0% -0.1% -0.3% -0.3% -0.2% -0.2% Total CAR 19.3% 13.4% 17.5% 13.2% 14.8% 14.0% 13.4%ROA 2.71% 1.89% 1.70% 2.75% 2.94% 2.87% 2.92% Equity/ assets 12% 10% 16% 16% 15% 14% 14%Leverage 8.2 8.8 7.6 6.3 6.6 6.9 7.1 RWA/ assets 71% 66% 64% 74% 86% 87% 89%Common equity to RWAs 16.3% 15.7% 21.2% 19.7% 16.3% 15.5% 14.7% Ave int earn assets/ ave assets 93% 90% 89% 91% 91% 90% 91%Bal sheet risk (RWA/ assets) 74% 72% 62% 81% 93% 94% 95% Ave int bearing liabs/ ave liabs 96% 96% 96% 95% 95% 96% 97%ROE (cash) 22.3% 16.7% 13.0% 17.3% 19.3% 19.8% 20.9% Loans/ assets 60% 62% 64% 70% 71% 74% 78%Underlying profit'ty (assets) 4.9% 4.7% 5.5% 6.0% 6.2% 6.1% 6.2% Loans/ deposits 92% 90% 94% 104% 108% 113% 118%Underlying profit'ty (equity) 41.2% 43.4% 42.7% 38.1% 40.7% 42.3% 44.4% Securities & Bills / assets 25% 19% 18% 10% 9% 9% 7%Underlying profit'ty (RWAs) 7.1% 6.9% 8.4% 8.6% 7.6% 7.0% 7.0%

NPLs/ loans 2% 2% 5% 3% 3% 3% 3%Sh'holder Cash Flow FY07 FY08 FY09 FY10 FY11e FY12e FY13e Provision cover 132% 103% 79% 125% 121% 120% 113%Adj (cash) earnings 2,034 1,442 1,325 2,883 3,705 4,272 5,071 Loan Loss / Ave. Gross Loans 2.18% 3.15% 4.60% 3.20% 2.90% 2.90% 2.80%Sh'holder CF (post RWA growth) 701 544 2,853 (722) (1,303) 1,010 1,216 VALUATION FY07 FY08 FY09 FY10 FY11e FY12e FY13ePayout Ratio (Sh'holder profit) 151% 141% 27% -200% -142% 212% 209% Price/ adj earnings 23.2 30.8 30.0 18.1 14.1 12.2 10.3

Price/ book 4.6 4.7 3.2 2.7 2.4 2.2 1.9Loan Yield 17.08% 17.22% 17.71% 15.70% 14.50% 14.20% 13.30% Price/ NTA 4.8 4.9 3.5 3.0 2.6 2.3 2.1Asset Yield 15.17% 16.00% 17.15% 14.68% 15.94% 15.82% 15.32% Dividend yield 2.1% 1.5% 1.5% 2.9% 3.7% 4.2% 5.0%Cost of Deposits 6.07% 6.48% 7.21% 0.00% 6.23% 5.68% 5.10% Free cash flow yield 1.4% 1.1% 5.7% -1.4% -2.6% 2.0% 2.4%Cost of Funds 6.80% 6.98% 7.25% 4.62% 5.70% 5.51% 5.01% INTERIMS 3Q09 4Q09 1Q10 2Q10 3Q10 4Q10 1Q11Spread 8.36% 9.02% 9.90% 10.06% 10.24% 10.32% 10.31% Net interest income 2,513 2,599 2,427 2,482 2,580 2,557 2,650Return on Free Funds 0.62% 0.40% 0.45% 0.17% 0.11% 0.05% 0.06% Non interest income 565 440 718 797 528 748 916Net Interest Margin 8.98% 9.42% 10.35% 10.23% 10.35% 10.37% 10.37% Total income 3,078 3,039 3,145 3,279 3,108 3,305 3,566

Opertaing expenses 1,496 1,584 1,531 1,719 1,386 1,671 1,881Interest exp/ int inc 40.8% 41.1% 39.7% 30.3% 35.0% 34.5% 32.3% Underlying profit 1,582 1,455 1,614 1,560 1,722 1,634 1,685Non int inc/ total inc 16.0% 19.0% 16.7% 21.7% 22.1% 22.5% 23.0% Loan loss 827 1,015 495 525 611 503 249Trading Profits/ total inc n.a n.a n.a n.a n.a n.a n.a Goodwill 114 52 52 (52) 0 0 0Ave headcount 33,285 38,480 41,616 47,509 53,402 53,402 53,402 Associates/ other (47) (49) (82) (71) (40) (201) (376)Personnel cost/ headcount (Rp mn) 73 79 72 78 87 106 126 Profit pre tax 595 340 986 1,016 1,071 929 1,060Profit/ headcount (Rp mn) 64 40 37 61 69 80 95 Reported NPAT 495 167 701 733 769 680 763Cost/ Income 50.8% 54.9% 50.3% 49.1% 48.9% 49.5% 49.4% NPAT attributable 495 167 701 733 769 680 763Effective tax rate 31.5% 32.7% 31.9% 25.4% 25.0% 25.0% 25.0% Adj (cash) earnings 609 219 752 682 769 680 763 Source: Company Reports E = Morgan Stanley Research Estimates

21



Risk-Reward Snapshot: PT Bank Danamon (BDMN.JK, Rp6,050, EW, PT Rp5,700)

Risk-Reward View: Fairly Valued

WARNINGDONOTEDIT_RRS4RL~BDMN.JK~

Rp5,700 (-6%)

Rp 6,050

Rp2,884 (-52%)

Rp7,435 (+23%)

0

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000


Rp



Bull Case Rp7,435


Stable inflation and increased infrastructure investment: Inflation remains controlled, requiring limited policy response. LandAcquisition Act passes, resulting in increased infrastructure spend and 8% GDP growth. Danamon increases loan growth to 25% CAGR.

Base Case Rp4,922


Stable inflation outlook, patchy investment in infrastructure: Inflation remains controlled, requiring limited policy response. Infrastructure investment subject to blockages, GDP growth limitedto 6.5% p.a. Danamon grows loans at 19% CAGR.

Bear Case Rp2,884


Rising inflation, no progress in infrastructure investment: Inflation spikes in 2H11, resulting in higher interest rates and a lossof confidence in the economy. Limited progress in infrastructure spend. GDP growth falls below 6%. Danamon expands lending at 17%.

Source: Morgan Stanley, FactSet Danamon Bear to Bull Case

2,884 3,231

4,922

6,373

7,435

1,062

1,450

1,691

347

5,700

-

1,000

2,000

3,000

4,000

5,000

6,000

7,000

8,000

Bear @8.5% RR


RR

Bear @7.4% RR


Base @7.4% RR


Bull @ 7.4%RR


Bull @ 6.0%RR

Pric

e Ta

rget

TP:


Investment Thesis: Why EW

• Following recent underperformance relative to peers, Danamon’s valuations now appear more reasonable, although it still offers the most downside to our target price (-6%).

• We see Danamon as most exposed to rising deposit costs as it lacks the deposit franchise of the larger banks, and is most dependent on time deposit funding. At the same time, pressure on the larger banks to keep loan rates low will limit Danamon’s ability to reprice its assets.

• Downside is limited by persistent speculation in the market on Danamon as a takeover target, which is unlikely to go away, in our view, as we have stated in our previous research on Danamon.

Key Value Drivers

• The main driver is NIM outlook. Each 10bps change to NIM affects earnings by 2.3%

Potential Catalyst

• Upside: Any indication that the group is able to expand loan yields in the face of rising funding costs.

• Downside: Further earnings pressure.


• Downside risks: Further tightening of funding costs exacerbates funding pressure

• Upside risks: Renewed speculation over future ownership.

22



Danamon Valuation Model We use a three-stage Gordon growth model, which sums the NPV of 10 years of explicit dividend forecasts, 10 years of implicit dividend forecasts, and forecast terminal BV to derive our base case valuation. We then set our price target by assigning 60% probability to our base case valuation, 35%

probability to our bull case and 5% probability to our bear case (see previous page for scenario valuations). On a base case valuation of Rp4,922, we arrive at a final price target of Rp5,700 for Danamon.

Exhibit 18 Danamon 3-Stage Gordon Growth Model Assumptions

Risk Premium 3.50%Risk Free Rate 7.30%Beta 1.38CoE, k 12.1%Sustainable RoE, r 12.1%Payout Ratio 75.0%Sustainable Growth rate, g 3.0%(r - g) / (k - g) 1.00Current Price (Rp) 6,050Fair Value (Rp) 4,922 5,700 Upside -19%

BDMN DPS (Rp) EPS (Rp) Payout Ratio RoE Sus. Growth CoE NTAPS2009 91 176 52% 10% 5% 12.1% 1,7312010e 172 331 52% 16% 8% 12.1% 2,0112011e 221 426 52% 19% 9% 12.1% 2,2832012e 255 491 52% 19% 9% 12.1% 2,5712013e 302 583 52% 20% 10% 12.1% 2,9212014e 357 689 52% 21% 10% 12.1% 3,3332015e 317 612 52% 17% 8% 12.1% 3,6112016e 186 359 52% 10% 5% 12.1% 3,6652017e 332 644 52% 14% 7% 12.1% 4,4672018e 435 844 52% 17% 8% 12.1% 5,0052019e 507 982 52% 18% 9% 12.1% 5,583NPV of forecast dividends 1,813

2020e 506 982 52% 19% 9.0% 12.1% 6,0592021e 577 1,121 52% 19% 9.0% 12.1% 6,6032022e 635 1,222 52% 19% 8.9% 12.1% 7,1892023e 692 1,330 52% 19% 9.1% 12.1% 7,8282024e 773 1,487 52% 19% 9.1% 12.1% 8,5422025e 844 1,623 52% 19% 9.1% 12.1% 9,3212026e 921 1,771 52% 18% 8.6% 12.1% 10,1712027e 952 1,831 52% 17% 8.2% 12.1% 11,0502028e 977 1,878 52% 16% 7.7% 12.1% 11,9512029e 994 1,912 52% 15% 7.2% 12.1% 12,869NPV of yr 11-20 dividends 1,648NPV of Terminal Value 1,46212 mth price target 4,92212 mth upside -19%plus yield on dividends paid before 2011 3%12 mth TSR -16% Source: Morgan Stanley Research Estimates

23



Disclosure Section The information and opinions in Morgan Stanley Research were prepared or are disseminated by Morgan Stanley Asia Limited (which accepts the responsibility for its contents) and/or Morgan Stanley Asia (Singapore) Pte. (Registration number 199206298Z, regulated by the Monetary Authority of Singapore, which accepts the responsibility for its contents), and/or Morgan Stanley Asia (Singapore) Securities Pte Ltd (Registration number 200008434H, regulated by the Monetary Authority of Singapore, which accepts the responsibility for its contents), and/or Morgan Stanley Taiwan Limited and/or Morgan Stanley & Co International plc, Seoul Branch, and/or Morgan Stanley Australia Limited (A.B.N. 67 003 734 576, holder of Australian financial services license No. 233742, which accepts responsibility for its contents), and/or Morgan Stanley Smith Barney Australia Pty Ltd (A.B.N. 19 009 145 555, holder of Australian financial services license No. 240813, which accepts responsibility for its contents), and/or Morgan Stanley India Company Private Limited and their affiliates (collectively, "Morgan Stanley"). For important disclosures, stock price charts and equity rating histories regarding companies that are the subject of this report, please see the Morgan Stanley Research Disclosure Website at www.morganstanley.com/researchdisclosures, or contact your investment representative or Morgan Stanley Research at 1585 Broadway, (Attention: Research Management), New York, NY, 10036 USA. Analyst Certification The following analysts hereby certify that their views about the companies and their securities discussed in this report are accurately expressed and that they have not received and will not receive direct or indirect compensation in exchange for expressing specific recommendations or views in this report: Nick Lord. Unless otherwise stated, the individuals listed on the cover page of this report are research analysts. Global Research Conflict Management Policy Morgan Stanley Research has been published in accordance with our conflict management policy, which is available at www.morganstanley.com/institutional/research/conflictpolicies. Important US Regulatory Disclosures on Subject Companies As of May 31, 2011, Morgan Stanley beneficially owned 1% or more of a class of common equity securities of the following companies covered in Morgan Stanley Research: PT Bank Central Asia, PT Bank Mandiri. Within the last 12 months, Morgan Stanley managed or co-managed a public offering (or 144A offering) of securities of PT Bank Negara Indonesia (Persero) Tbk. Within the last 12 months, Morgan Stanley has received compensation for investment banking services from PT Bank Negara Indonesia (Persero) Tbk. In the next 3 months, Morgan Stanley expects to receive or intends to seek compensation for investment banking services from PT Bank Central Asia, PT Bank Danamon Indonesia. Within the last 12 months, Morgan Stanley has received compensation for products and services other than investment banking services from PT Bank Central Asia, PT Bank Danamon Indonesia, PT Bank Mandiri, PT Bank Negara Indonesia (Persero) Tbk. Within the last 12 months, Morgan Stanley has provided or is providing investment banking services to, or has an investment banking client relationship with, the following company: PT Bank Central Asia, PT Bank Danamon Indonesia, PT Bank Negara Indonesia (Persero) Tbk. Within the last 12 months, Morgan Stanley has either provided or is providing non-investment banking, securities-related services to and/or in the past has entered into an agreement to provide services or has a client relationship with the following company: PT Bank Central Asia, PT Bank Danamon Indonesia, PT Bank Mandiri, PT Bank Negara Indonesia (Persero) Tbk. The equity research analysts or strategists principally responsible for the preparation of Morgan Stanley Research have received compensation based upon various factors, including quality of research, investor client feedback, stock picking, competitive factors, firm revenues and overall investment banking revenues. Morgan Stanley and its affiliates do business that relates to companies/instruments covered in Morgan Stanley Research, including market making, providing liquidity and specialized trading, risk arbitrage and other proprietary trading, fund management, commercial banking, extension of credit, investment services and investment banking. Morgan Stanley sells to and buys from customers the securities/instruments of companies covered in Morgan Stanley Research on a principal basis. Morgan Stanley may have a position in the debt of the Company or instruments discussed in this report. Certain disclosures listed above are also for compliance with applicable regulations in non-US jurisdictions. STOCK RATINGS Morgan Stanley uses a relative rating system using terms such as Overweight, Equal-weight, Not-Rated or Underweight (see definitions below). Morgan Stanley does not assign ratings of Buy, Hold or Sell to the stocks we cover. Overweight, Equal-weight, Not-Rated and Underweight are not the equivalent of buy, hold and sell. Investors should carefully read the definitions of all ratings used in Morgan Stanley Research. In addition, since Morgan Stanley Research contains more complete information concerning the analyst's views, investors should carefully read Morgan Stanley Research, in its entirety, and not infer the contents from the rating alone. In any case, ratings (or research) should not be used or relied upon as investment advice. An investor's decision to buy or sell a stock should depend on individual circumstances (such as the investor's existing holdings) and other considerations. Global Stock Ratings Distribution (as of May 31, 2011) For disclosure purposes only (in accordance with NASD and NYSE requirements), we include the category headings of Buy, Hold, and Sell alongside our ratings of Overweight, Equal-weight, Not-Rated and Underweight. Morgan Stanley does not assign ratings of Buy, Hold or Sell to the stocks we cover. Overweight, Equal-weight, Not-Rated and Underweight are not the equivalent of buy, hold, and sell but represent recommended relative weightings (see definitions below). To satisfy regulatory requirements, we correspond Overweight, our most positive stock rating, with a buy recommendation; we correspond Equal-weight and Not-Rated to hold and Underweight to sell recommendations, respectively. Coverage Universe Investment Banking Clients (IBC)

Stock Rating Category Count % of Total Count

% of Total IBC

% of Rating Category

Overweight/Buy 1153 41% 464 48% 40%Equal-weight/Hold 1140 41% 365 38% 32%Not-Rated/Hold 108 4% 20 2% 19%Underweight/Sell 390 14% 108 11% 28%Total 2,791 957 Data include common stock and ADRs currently assigned ratings. An investor's decision to buy or sell a stock should depend on individual circumstances (such as the investor's existing holdings) and other considerations. Investment Banking Clients are companies from whom Morgan Stanley received investment banking compensation in the last 12 months.

24



Analyst Stock Ratings Overweight (O or Over) - The stock's total return is expected to exceed the total return of the relevant country MSCI Index, on a risk-adjusted basis over the next 12-18 months. Equal-weight (E or Equal) - The stock's total return is expected to be in line with the total return of the relevant country MSCI Index, on a risk-adjusted basis over the next 12-18 months. Not-Rated (NR) - Currently the analyst does not have adequate conviction about the stock's total return relative to the relevant country MSCI Index on a risk-adjusted basis, over the next 12-18 months. Underweight (U or Under) - The stock's total return is expected to be below the total return of the relevant country MSCI Index, on a risk-adjusted basis, over the next 12-18 months. Unless otherwise specified, the time frame for price targets included in Morgan Stanley Research is 12 to 18 months. Analyst Industry Views Attractive (A): The analyst expects the performance of his or her industry coverage universe over the next 12-18 months to be attractive vs. the relevant broad market benchmark, as indicated below. In-Line (I): The analyst expects the performance of his or her industry coverage universe over the next 12-18 months to be in line with the relevant broad market benchmark, as indicated below. Cautious (C): The analyst views the performance of his or her industry coverage universe over the next 12-18 months with caution vs. the relevant broad market benchmark, as indicated below. Benchmarks for each region are as follows: North America - S&P 500; Latin America - relevant MSCI country index or MSCI Latin America Index; Europe - MSCI Europe; Japan - TOPIX; Asia - relevant MSCI country index. . Stock Price, Price Target and Rating History (See Rating Definitions)

25



26



Important Disclosures for Morgan Stanley Smith Barney LLC Customers Citi Investment Research & Analysis (CIRA) research reports may be available about the companies or topics that are the subject of Morgan Stanley Research. Ask your Financial Advisor or use Research Center to view any available CIRA research reports in addition to Morgan Stanley research reports. Important disclosures regarding the relationship between the companies that are the subject of Morgan Stanley Research and Morgan Stanley Smith Barney LLC, Morgan Stanley and Citigroup Global Markets Inc. or any of their affiliates, are available on the Morgan Stanley Smith Barney disclosure website at www.morganstanleysmithbarney.com/researchdisclosures. For Morgan Stanley and Citigroup Global Markets, Inc. specific disclosures, you may refer to www.morganstanley.com/researchdisclosures and https://www.citigroupgeo.com/geopublic/Disclosures/index_a.html. Each Morgan Stanley Equity Research report is reviewed and approved on behalf of Morgan Stanley Smith Barney LLC. This review and approval is conducted by the same person who reviews the Equity Research report on behalf of Morgan Stanley. This could create a conflict of interest. Other Important Disclosures Morgan Stanley is not acting as a municipal advisor and the opinions or views contained herein are not intended to be, and do not constitute, advice within the meaning of Section 975 of the Dodd-Frank Wall Street Reform and Consumer Protection Act. Morgan Stanley produces an equity research product called a "Tactical Idea." Views contained in a "Tactical Idea" on a particular stock may be contrary to the recommendations or views expressed in research on the same stock. This may be the result of differing time horizons, methodologies, market events, or other factors. For all research available on a particular stock, please contact your sales representative or go to Client Link at www.morganstanley.com. Morgan Stanley Research does not provide individually tailored investment advice. Morgan Stanley Research has been prepared without regard to the individual financial circumstances and objectives of persons who receive it. Morgan Stanley recommends that investors independently evaluate particular investments and strategies, and encourages investors to seek the advice of a financial adviser. The appropriateness of a particular investment or strategy will depend on an investor's individual circumstances and objectives. The securities, instruments, or strategies discussed in Morgan Stanley Research may not be suitable for all investors, and certain investors may not be eligible to purchase or participate in some or all of them. The fixed income research analysts, strategists or economists principally responsible for the preparation of Morgan Stanley Research have received compensation based upon various factors, including quality, accuracy and value of research, firm profitability or revenues (which include fixed income trading and capital markets profitability or revenues), client feedback and competitive factors. Fixed Income Research analysts', strategists' or economists' compensation is not linked to investment banking or capital markets transactions performed by Morgan Stanley or the profitability or revenues of particular trading desks. Morgan Stanley Research is not an offer to buy or sell or the solicitation of an offer to buy or sell any security/instrument or to participate in any particular trading strategy. The "Important US Regulatory Disclosures on Subject Companies" section in Morgan Stanley Research lists all companies mentioned where Morgan Stanley owns 1% or more of a class of common equity securities of the companies. For all other companies mentioned in Morgan Stanley Research, Morgan Stanley may have an investment of less than 1% in securities/instruments or derivatives of securities/instruments of companies and may trade them in ways different from those discussed in Morgan Stanley Research. Employees of Morgan Stanley not involved in the preparation of Morgan Stanley Research may have investments in securities/instruments or derivatives of securities/instruments of companies mentioned and may trade them in ways different from those discussed in Morgan Stanley Research. Derivatives may be issued by Morgan Stanley or associated persons. With the exception of information regarding Morgan Stanley, Morgan Stanley Research is based on public information. Morgan Stanley makes every effort to use reliable, comprehensive information, but we make no representation that it is accurate or complete. We have no obligation to tell you when opinions or information in Morgan Stanley Research change apart from when we intend to discontinue equity research coverage of a subject company. Facts and views presented in Morgan Stanley Research have not been reviewed by, and may not reflect information known to, professionals in other Morgan Stanley business areas, including investment banking personnel. Morgan Stanley Research personnel may participate in company events such as site visits and are generally prohibited from accepting payment by the company of associated expenses unless pre-approved by authorized members of Research management. The value of and income from your investments may vary because of changes in interest rates, foreign exchange rates, default rates, prepayment rates, securities/instruments prices, market indexes, operational or financial conditions of companies or other factors. There may be time limitations on the exercise of options or

27



other rights in securities/instruments transactions. Past performance is not necessarily a guide to future performance. Estimates of future performance are based on assumptions that may not be realized. If provided, and unless otherwise stated, the closing price on the cover page is that of the primary exchange for the subject company's securities/instruments. Morgan Stanley may make investment decisions or take proprietary positions that are inconsistent with the recommendations or views in this report. To our readers in Taiwan: Information on securities/instruments that trade in Taiwan is distributed by Morgan Stanley Taiwan Limited ("MSTL"). Such information is for your reference only. Information on any securities/instruments issued by a company owned by the government of or incorporated in the PRC and listed in on the Stock Exchange of Hong Kong ("SEHK"), namely the H-shares, including the component company stocks of the Stock Exchange of Hong Kong ("SEHK")'s Hang Seng China Enterprise Index is distributed only to Taiwan Securities Investment Trust Enterprises ("SITE"). The reader should independently evaluate the investment risks and is solely responsible for their investment decisions. Morgan Stanley Research may not be distributed to the public media or quoted or used by the public media without the express written consent of Morgan Stanley. Information on securities/instruments that do not trade in Taiwan is for informational purposes only and is not to be construed as a recommendation or a solicitation to trade in such securities/instruments. MSTL may not execute transactions for clients in these securities/instruments. To our readers in Hong Kong: Information is distributed in Hong Kong by and on behalf of, and is attributable to, Morgan Stanley Asia Limited as part of its regulated activities in Hong Kong. If you have any queries concerning Morgan Stanley Research, please contact our Hong Kong sales representatives. Certain information in Morgan Stanley Research was sourced by employees of the Shanghai Representative Office of Morgan Stanley Asia Limited for the use of Morgan Stanley Asia Limited. Morgan Stanley is not incorporated under PRC law and the research in relation to this research is conducted outside the PRC. Morgan Stanley Research will be distributed only upon request of a specific recipient. Morgan Stanley Research does not constitute an offer to sell or the solicitation of an offer to buy any securities in the PRC. PRC investors shall have the relevant qualifications to invest in such securities and shall be responsible for obtaining all relevant approvals, licenses, verifications and/or registrations from the relevant governmental authorities themselves. Morgan Stanley Research is disseminated in Brazil by Morgan Stanley C.T.V.M. S.A.; in Japan by Morgan Stanley MUFG Securities Co., Ltd.; in Hong Kong by Morgan Stanley Asia Limited (which accepts responsibility for its contents); in Singapore by Morgan Stanley Asia (Singapore) Pte. (Registration number 199206298Z) and/or Morgan Stanley Asia (Singapore) Securities Pte Ltd (Registration number 200008434H), regulated by the Monetary Authority of Singapore, which accepts responsibility for its contents; in Australia to "wholesale clients" within the meaning of the Australian Corporations Act by Morgan Stanley Australia Limited A.B.N. 67 003 734 576, holder of Australian financial services license No. 233742, which accepts responsibility for its contents; in Australia to "wholesale clients" and "retail clients" within the meaning of the Australian Corporations Act by Morgan Stanley Smith Barney Australia Pty Ltd (A.B.N. 19 009 145 555, holder of Australian financial services license No. 240813, which accepts responsibility for its contents; in Korea by Morgan Stanley & Co International plc, Seoul Branch; in India by Morgan Stanley India Company Private Limited; in Canada by Morgan Stanley Canada Limited, which has approved of, and has agreed to take responsibility for, the contents of Morgan Stanley Research in Canada; in Germany by Morgan Stanley Bank AG, Frankfurt am Main and Morgan Stanley Private Wealth Management Limited, Niederlassung Deutschland, regulated by Bundesanstalt fuer Finanzdienstleistungsaufsicht (BaFin); in Spain by Morgan Stanley, S.V., S.A., a Morgan Stanley group company, which is supervised by the Spanish Securities Markets Commission (CNMV) and states that Morgan Stanley Research has been written and distributed in accordance with the rules of conduct applicable to financial research as established under Spanish regulations; in the United States by Morgan Stanley & Co. Incorporated, which accepts responsibility for its contents. Morgan Stanley & Co. International plc, authorized and regulated by the Financial Services Authority, disseminates in the UK research that it has prepared, and approves solely for the purposes of section 21 of the Financial Services and Markets Act 2000, research which has been prepared by any of its affiliates. Morgan Stanley Private Wealth Management Limited, authorized and regulated by the Financial Services Authority, also disseminates Morgan Stanley Research in the UK. Private U.K. investors should obtain the advice of their Morgan Stanley & Co. International plc or Morgan Stanley Private Wealth Management representative about the investments concerned. RMB Morgan Stanley (Proprietary) Limited is a member of the JSE Limited and regulated by the Financial Services Board in South Africa. RMB Morgan Stanley (Proprietary) Limited is a joint venture owned equally by Morgan Stanley International Holdings Inc. and RMB Investment Advisory (Proprietary) Limited, which is wholly owned by FirstRand Limited. The information in Morgan Stanley Research is being communicated by Morgan Stanley & Co. International plc (DIFC Branch), regulated by the Dubai Financial Services Authority (the DFSA), and is directed at Professional Clients only, as defined by the DFSA. The financial products or financial services to which this research relates will only be made available to a customer who we are satisfied meets the regulatory criteria to be a Professional Client. The information in Morgan Stanley Research is being communicated by Morgan Stanley & Co. International plc (QFC Branch), regulated by the Qatar Financial Centre Regulatory Authority (the QFCRA), and is directed at business customers and market counterparties only and is not intended for Retail Customers as defined by the QFCRA. As required by the Capital Markets Board of Turkey, investment information, comments and recommendations stated here, are not within the scope of investment advisory activity. Investment advisory service is provided in accordance with a contract of engagement on investment advisory concluded between brokerage houses, portfolio management companies, non-deposit banks and clients. Comments and recommendations stated here rely on the individual opinions of the ones providing these comments and recommendations. These opinions may not fit to your financial status, risk and return preferences. For this reason, to make an investment decision by relying solely to this information stated here may not bring about outcomes that fit your expectations. The trademarks and service marks contained in Morgan Stanley Research are the property of their respective owners. Third-party data providers make no warranties or representations of any kind relating to the accuracy, completeness, or timeliness of the data they provide and shall not have liability for any damages of any kind relating to such data. The Global Industry Classification Standard ("GICS") was developed by and is the exclusive property of MSCI and S&P. Morgan Stanley has based its projections, opinions, forecasts and trading strategies regarding the MSCI Country Index Series solely on publicly available information. MSCI has not reviewed, approved or endorsed the projections, opinions, forecasts and trading strategies contained herein. Morgan Stanley has no influence on or control over MSCI's index compilation decisions. Morgan Stanley Research, or any portion thereof may not be reprinted, sold or redistributed without the written consent of Morgan Stanley. Morgan Stanley Research is disseminated and available primarily electronically, and, in some cases, in printed form. Additional information on recommended securities/instruments is available on request.

© 2011 Morgan Stanley


Industry Coverage:Indonesia Banks

Company (Ticker) Rating (as of)Price* (06/10/2011)

Nick Lord PT Bank Central Asia (BBCA.JK) E (01/13/2011) Rp7,000PT Bank Danamon Indonesia (BDMN.JK)

E (01/13/2011) Rp6,050

PT Bank Rakyat Indonesia (BBRI.JK) PT Bank Negara Indonesia (Persero) Tbk (BBNI.JK) PT Bank Mandiri (BMRI.JK)

O (01/13/2011)

E (06/13/2011)

O (06/13/2011)

Rp6,300

Rp3,750

Rp7,000

Stock Ratings are subject to change. Please see latest research for each company. * Historical prices are not split adjusted.

The Americas 1585 Broadway New York, NY 10036-8293 United States Tel: +1 (1) 212 761 4000

Europe 20 Bank Street, Canary Wharf London E14 4AD United Kingdom Tel: +44 (0) 20 7 425 8000

Japan 4-20-3 Ebisu, Shibuya-ku Tokyo 150-6008 Japan Tel: +81 (0) 3 5424 5000

Asia/Pacific 1 Austin Road West Kowloon Hong Kong Tel: +852 2848 5200

Morgan Stanley - Indonesia Banks - 6132011

Documents

Transcript of Morgan Stanley - Indonesia Banks - 6132011