Bank Central Asia (BBCA IJ)
3Q25 Earnings: In Line Earnings Amid Higher CoC on Consumer Weakness and Proactive Provisioning
- BBCA booked 3Q25 net profit of Rp14.4tr as higher CoC offset robust PPOP. 9M25 NP came in at Rp43.4tr (+6% yoy) inline with ours and cons.
- Management is looking at higher loans, CASA, fee income, and better asset quality in navigating the lower NIM amid low interest rate regime.
- We maintain Buy rating on BBCA with a lower TP of Rp11,200. BBCA remains our top pick in the sector with its robust asset quality.
9M25: Efficiency gains amid margin pressure
In 9M25, BBCA booked Rp43.4tr net profit (+6% yoy), in line with our/cons at 74%/75% of FY25F. NIM fell 18bps yoy to 6.2%, driven by softer EA yield despite stable CoF (+2bps yoy). Efficiency continued to improve as CIR declined to 33.3% (-64bps yoy) with modest opex growth (+5% yoy) and solid gains in NII (+5% yoy) and other income (+12% yoy). Provision expenses rose 49% yoy, lifting CoC to 0.5% (+12bps yoy) as the bank addressed consumer loan weakness post-1Q25. Management maintained its FY25 CoC target at 0.5%, signaling prudence amid selective lending.
3Q25: Proactive provisioning weighed on earnings
In 3Q25, BBCA reported net profit of Rp14.4tr in 3Q25 (-3% qoq, +1% yoy), mainly weighed by higher CoC despite solid PPOP performance. CoC rose to 0.6% (+22bps qoq, +19bps yoy), reflecting weakness in consumer loans, particularly mortgage and auto, and proactive provisioning in corporate and commercial segments. NIM slipped to 6.1% (-6bps qoq, -37bps yoy), pressured by a lower loan yield of 7.2% and a higher mix of corporate loans. CoF remained stable at 1.1% (-6bps qoq, -2bps yoy), supported by a higher CASA ratio and stable CASA CoF at 57bps. Despite higher opex, CIR was manageable at 33.2% as strong other income growth (+10% qoq, +14% yoy) offset the cost increase.
Accelerated loans in 4Q25 and FY26 to offset the potential lower loan yield
BBCA anticipates stronger utilization in corporate loan facilities in 4Q25 and guides for FY25F LaR of ~5.7%, as it remains cautious in auto loans while seeing improvement in mortgages and stable SME quality. In FY26, BBCA expects a 75bps BI rate cut in FY26F, which could compress NIM by 20–30bps. Nonetheless, the mgmt. expects the downside to be cushioned by stronger loan growth of 8–10%, higher fee-based income, and improving asset quality in a lower rate environment.
Maintain Buy with a lower TP of Rp11,200
We maintain our Buy rating with a lower TP of Rp11,200 (from Rp11,900 prev.), derived from GGM with a 5-year avg. 6.8% CoE (from 6.5% prev.) and 21.4% FY25F ROE, which implies an FV PBV of 4.9x. BBCA remains our top pick for its strong liquidity, resilient CoF, and solid asset quality. Risks to our view include asset quality deterioration and lower-than-expected loan yield.
… Read More 20251021 BBCA
