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BCA eyes corporate bonds to boost loan growth
The strategy is BCA's response to slow loan growth in the consumer and small business segments.
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Positive growth: Private lender BCA president director Jahja Setiaatmadja (left), accompanied by president commissioner Djohan Emir Setijoso, speaks during a virtual press conference in Jakarta on Monday. BCA booked Rp 12.2 trillion (US$836.9 million) in net profits in the first half of 2020. Lending grew 5.3 percent to Rp 595.1 trillion in June. (JP/Wendra Ajistyatama)
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ndonesia's largest private lender, Bank Central Asia (BCA), is keen on buying more corporate bonds to deepen its business within the corporate segment amid difficulties increasing loan disbursements in the consumer and small business segments.
BCA president director Jahja Setiaatmadja told reporters on Thursday that the lender was eyeing bonds from corporations in the petrochemical, pulp and paper and crude palm oil industries.
“In our opinion, corporate bonds are also a part of corporate loans. We provide for companies’ business purposes, not for non-business purposes. What's the difference with credit?” Jahja said during the lender's third quarter press conference.
Read also: Second loan-restructuring extension gives banks breathing room
According to its presentation material, BCA's total loan growth stood at 4.1 percent year-on-year (yoy) in September.
Small business loans, the second biggest contributor to BCA's total loan disbursements, booked the lowest growth at 1.5 percent yoy in September, just slightly below consumer loans at 2.1 percent yoy, aided by high growth in mortgage demand.
Meanwhile, corporate loans, the largest credit contributor, grew 7.1 percent yoy in September, mainly driven by the power, pulp-paper industries and palm oil industries, the latter of which is expanding operations amid a global commodity price hike.
