Corporate credit segment will be the main driver of PT Bank Central Asia Tbk (BBCA)’s credit growth by the end of 2016, targetted at 10%-12%. In the first semester of 2016, BBCA’s corporate credit increased the highest at 19.6% to 135.4 trillion IDR. PT Samuel Sekuritas Indonesia recommended a Hold on BBCA’s shares and increased its target price from 13,900 IDR to 14,900 IDR.
Eugene K Galbraith, BBCA’s vice president director, said that up until June 2016, the company’s total credit grew by 11.5% to 387.09 trillion IDR. “This year, the credit growth of 10-12% was driven by corporate and consumer credits”, said Galbraith. The company’s credit growth was higher than the industry average of 8.3%. Consumer credit segment was up by 9.1% to 105.2 trillion IDR by June 2016, while commercial credit segment and micro and small enterprises segment went up by 6.5% to 146.5 trillion IDR.
Andy Ferdinand, an analyst at Samuel Sekuritas, mentioned that BBCA’s credit growth of 11.5% and the increasing net interest margin (NIM) by 42 bps was driving the net income growth of 12.1% to 9.6 trillion IDR or 51% of estimated annual net income. But the deteriorating credit quality, seen in the increase of gross NPL by 70bps to 1.4%, also pushed provision charge up by 45% yoy to 10.1 trillion IDR and is predicted to slow the increase of 2016 net income.
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