The nation’s largest private lender, Bank Central Asia (BCA), booked Rp 6.11 trillion in net profit up to September of this year, a 20 percent increase from Rp 5.1 trillion in the same period last year, mainly thanks to less provision for bad debts.
“The need for provisioning in 2010 is lower than in 2009,” BCA’s president director Djohan Emir Setijoso said at a briefing on the bank’s third quarter financial performance at Hotel Kempinski
in Jakarta.
Setijoso was referring to BCA data showing a 94 percent decline in debt provision to Rp 135 billion as of September this year from Rp 2.25 trillion in the same period, last year.
BCA also booked a 57.4 percent increase in non-interest income up to Rp 5.6 trillion from Rp 3.56 trillion last year. The jump was partly due to an adjustment on Bank Indonesia (BI) new regulation on financial accounting standards (PSAK) which reclassify income from BI certificates (SBI) from interest income to non-interest income.
The bank’s gain on sale of financial assets, which includes SBI income, soared by 77.64 times to Rp 1.7 trillion from Rp 22 billion last year.
Another impact of the PSAK adjustment is lower net interest income, which fell by 13.6 percent to Rp 9.48 trillion compared to last year’s Rp 10.97 trillion. Net interest margin (NIM) also fell to 5.5 percent from last year’s 6.4 percent.
In line with the growth in profits, BCA’s loan growth reached 23 percent by September this year, with Rp 138.86 trillion of outstanding loans versus Rp 112.72 trillion last year.
Consumer lending grew the most, increasing by 35.2 percent to Rp 34.37 trillion by September of this year. Meanwhile, commercial and small and medium enterprises (SMEs) loans grew by 23.3 percent to Rp 52.54 trillion while corporate lending advanced 17.1 percent to
Rp 51.96 trillion.
BCA held Rp 136.63 trillion in third party funds up to September of this year, up by 13.5 percent from last year’s Rp 112.72 trillion. Vice president Jahja Setiaatmadja expressed concerns that slow growth in deposits might be caused by BCA’s “uncompetitive deposit rates compared to other banks”.
Fast-growing loans and slower deposits growth brought the bank’s loan-to-deposit (LDR) ratio up to 52.6 percent, compared to last year’s September figure of 47.8 percent.
Although its lending grew faster than deposits, BCA’s capital adequacy ratio (CAR) was maintained at at a manageable level of 14.1 percent, higher than BI’s 8 percent threshold.
Setijoso said that the lender might launch a subordinated debt or bond worth about US$200 million next year if lending grows faster while capitalization slides. “That’s only if demand for loans surges,” he said.
Although lending grew by 23 percent, gross non performing loans (NPL) remained manageable by September of this year at 0.8 percent, down from last year’s 1.3 percent. BI’s acceptable level of gross NPL is 5 percent.
The assets of BCA, which has 900 branches and 6,948 automated teller machines (ATMs) spread throughout the country, reached Rp 310.2 trillion by September of this year, a 13.5 percent increase compared to last year’s Rp 273.29 trillion. Return on assets reached 3.5 percent by September of this year.
Shares in BCA (BBCA) fell on Wednesday’s trading, to close at Rp 7,000 apiece, down 0.71 percent, or 50 points, from a day earlier. BBCA has advanced by about 46 percent so far this year, outperforming the broader Jakarta composite index (JCI) 40.78 percent increase. Return on equity reached 32.3 percent.
BCA has a total market capitalization of over Rp 173 trillion. (est)
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