PT Bank Central Asia Tbk’s plan (BBCA) to acquire two small banks with a core capital of below Rp 1 trillion is predicted to be part of the bank’s strategy to grab microcredit and distribute Kredit Usaha Rakyat (KUR). The acquisition will improve bank lending and yield higher net interest margins.
BCA has set aside Rp 1.5 trillion to Rp 2 trillion for the acquisition of two small banks. Based on the financial report in March 2016, the cash position of the Bank amounted to Rp 18.44 trillion, sufficient to finance the acquisition. Samuel Sekuritas who recommended holding BBCA estimated BBCA shares to be traded at 16.8 times PE and PBV 3 times.
Since 2014 the bank has been lending gradually to small and medium enterprises (SMEs). Until the first quarter of 2016, BCA’s commercial and SME lending reached Rp 134.41 trillion, or 28% of the total loan portfolio. This year, the company began distributing KUR with a target of Rp 1 trillion. (*)
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