Bank Central Asia ($BBCA) recorded a surprising net profit in February 2025, reaching 4.2 trillion rupiah, with solid growth of +12% YoY despite a -10% MoM decline. This shows a fairly good performance, especially with the cumulative net profit during 2025 recording a growth of +8.4% YoY to a total of 9 trillion rupiah, exceeding the consensus estimate which only estimates +7% YoY growth.
Reduced Credit Costs and Liquidity Challenges
In addition, BBCA also managed to record a reduction in credit cost (CoC) to 0.05% in February 2025, from the previous level of 0.76% in January and 0.57% in February 2024. This reduction brought the CoC for the first two months of 2025 down to 0.4%, although it remains higher than management’s target of 0.3% for credit costs.
Liquidity Conditions: Tight but Still Stable
On the other hand, liquidity in the market is starting to show signs of tightness. BBCA’s bank-only credit growth for 2M25 slowed to +14% YoY, compared to +15.1% YoY in January 2025. This is in line with management’s target which estimates that consolidated credit growth will be in the range of +6%-8% YoY throughout this year.
At the same time, Third Party Funds (DPK) stagnated with +3.9% YoY growth, resulting in a Loan-to-Deposit Ratio (LDR) increase to 80.6%. Although this tightening of liquidity is a common issue in the industry, BBCA still has relatively good liquidity when compared to other major banks.
Decreased NIM Composition
In the same period, Net Interest Margin (NIM) recorded the lowest figure since February 2024, at the level of 5.4%. This decreased compared to 5.33% in February last year. Nevertheless, BBCA’s interest income recorded a growth of +4.8% YoY with an achievement of 7.1 trillion rupiah.
Apparently, the low NIM is caused by the momentum of interest income growth that has not been maximized and interest costs are reduced. However, BBCA’s net interest income (NII) was able to grow +6% YoY thanks to management’s efforts to keep interest rates low.
Response and Future Strategy
Overall, we assess BBCA’s bank-only performance in February 2025 as a mixed performance. Although credit costs are reduced, low NIM is a challenge in itself. However, there are positive signals with the potential for NIM recovery in the future thanks to the possibility of interest rate cuts and adjustments in the credit mix that are expected to have a positive impact on earnings from credit.
From all this information, it seems that the outlook for BBCA in the future is still bright, especially looking at the various strategic measures and innovations implemented by the management. The question is, are these measures enough to continue to boost their financial performance amid tight liquidity and industry competition?
Finally, BBCA’s financial performance reflects the ever-changing dynamics in the banking sector. While continuing to monitor the development and implementation of policies, we can hope that the strategies implemented will lead BBCA towards even better growth in the future.