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ublicly listed Bank Central Asia (BCA), the country'€™s largest private lender, is aiming for loan growth of 10 to 11 percent loan this year, a '€œconservative'€ target as it started to see lending pick up speed in the last months of 2015, the bank'€™s management says.

'€œWe are still conservative as we'€™re aiming for around 10 percent to 11 percent this year'€ in comparison with around 12 percent loan growth in realization throughout last year, BCA president director Jahja Setiaatmadja said.

Jahja said the bank decided to set a conservative target as it saw lingering effects of last year'€™s sluggish economy, when the country'€™s GDP grew at around 4.7 percent, a level not seen since 2009.

The Financial Services Authority (OJK) has said that nationwide bank loan growth may reach 14 percent this year, based on the lenders'€™ business plans submitted to the body, higher than the 10 to 11 percent growth seen in 2015.

According to Jahja, the bank noted a drop in demand in the first and second quarters of 2015, which occurred in almost all economic sectors, especially those related to coal.

BCA, however, started seeing upticks in the corporate segment in the third and fourth quarters of last year, with a little bit of improvement in consumer borrowing, including mortgages, as a result of promotional packages linked to lower lending rates. '€œI think, about Rp 20 trillion [US$1.4 billion] of our total mortgages, which reached almost Rp 60 trillion last year, were new loans,'€ he said.

However, despite being cautious this year, Jahja said the bank would be ready to revise its loan growth target to around 12 percent to
15 percent in the second half of 2016, should there be higher loan demand and ample liquidity.

'€œWe want to see whether loan demand in the first and second quarters this year increases higher than our target. If so, then we will aim bigger,'€ he said.

Bank Indonesia (BI) has cut its key rate by 25 basis points to 7.25 percent in support of economic growth. The government is aiming for higher GDP growth this year of 5.3 percent.

Jahja said the bank would not push loan growth in certain sectors this year as it was expecting to follow '€œthe flows in the market'€, citing infrastructure as the one sector that would show higher demand for loans.

'€œWe have a large proportion in the corporate segment, so that we see potential in infrastructure projects. However, we have yet to decide which projects we want to be involved in,'€ he said.

In terms of third-party funds (DPK), Jahja said the bank expected that the increase would follow its credit growth range this year, but would potentially grow higher if the economic situation improved.

According to Jahja, as a bank with a high proportion of current and saving accounts (CASA), it usually experiences higher growth in these low-cost funds during an economic '€œboom'€, rather than time deposits, which tend to be influenced by rate competition.

As of the third quarter last year, BCA saw 7 percent year-on-year (yoy) growth to Rp 462.3 trillion in DPK, with 76.5 percent of this comprising CASA.

BCA'€™s outstanding loans grew 10.3 percent yoy to Rp 364.8 trillion as of September last year, boosting its consolidated net profit growth by 9.6 percent to Rp 13.3 trillion in the third quarter of 2015.