Bank Central Asia’s net profit jumps by 11.4% to IDR7.6t in May

On back of its roaring loan growth.

Lending has been the strength of Bank Central Asia this May, as it saw its earnings jump on back of its strong loan growth of 11%.

According to Maybank Kim Eng, at 77%, its CASA portion was above those of its peers.

“Such strong deposit base helped BBCA maintain NIM at close to 7%, which allowed for 11% YoY profit growth despite the 40% YoY jump in provision to cover the bank’s rising NPLs of 1.2% by 5M16. By 5M16, BBCA posted the highest net profit growth compared with its State-owned peers,” Maybank Kim Eng said.

Maybank Kim Eng adds that it expects the bank’s NPL to peak at 1.5% in 2H16, mainly as it reclassifies corporate, as well as commercial and SME loans.

“These are the same segments that drove Indonesia banking sector’s total NPLs from 2.5% by YE15 to 2.9% in 4M16. However, with coverage of over 200% (vs. ~140% for peers) BBCA’s rising NPLs should not pose a threat to earnings,” Maybank Kim Eng noted.