Bank Central Asia (BBCA.IJ Rp8,725; BUY TP Rp11,900) 1Q25 Results: In line earnings with robust PPOP growth offsetting the higher provisions

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Bank Central Asia (BBCA IJ)

1Q25 Results: In line earnings with robust PPOP growth offsetting the higher provisions

BBCA booked 1Q25 net profit of Rp14.1tr (+3% qoq, +10% yoy), in line with our and consensus’ FY24 estimate.
The bank continues to demonstrate a strong deposit franchise, allowing it to grow customer deposits 5% qoq amid the tight liquidity in 1Q25.
We maintain Buy rating on BBCA with an unchanged TP of Rp11,900. BBCA remains our top pick in the sector.

Solid earnings growth in 1Q25

BBCA booked a net profit of Rp14.1tr in 1Q25 (+3% qoq, +10% yoy), forming 24% of our and consensus’ FY25F, i.e., in line. The solid earnings growth was driven by PPOP which grew +8% qoq, +10% yoy, while provisioning jumped qoq due to the base reversal in 4Q24. Despite the 16% yoy higher provision expenses, CoC remained steady at 0.4% as loans expanded. Loans grew +2% qoq and +13% yoy to Rp941tr, with growth across segments i.e., Corporate +14%, SME +13%, Consumer +11%, Commercial +10%. The management attributed the qoq loan growth to the money-market lending in the corporate space, which is short-term in nature. NIM edged down to 6.2% (-27bps qoq, -9bps yoy), but CoF held steady at 1.1%, supported by strong CASA momentum.

Strong CASA growth from mass market segment amid tight liquidity

Total deposits rose +5% qoq to Rp1,193tr (+6% yoy), driven by an 8% yoy CASA surge, while TDs slipped 1% yoy as the bank reduced its rate on time deposit. Management noted that HNWI deposits declined due to a shift toward investment instruments, while the mass-market segment led the growth in the savings deposit.

Deteriorating asset quality and one-off uptick in LaR

The bank’s NPL ratio rose to 2.0% (+33bps qoq), with the textile sector contributing the highest (~35% of NPL). Excluding textile-related NPL, the ratio would stand around 1.2–1.3%. LaR also increased to 6.0%, but adjusting for a one-off restructured debtor in the mineral sector, it normalized at ~5.4%, which should be reversed in 2Q. NPL coverage slipped to 180%, but the bank remains optimistic in its provisioning outlook.

Maintain Buy with a TP of Rp11,900

We maintain our Buy rating with a TP of Rp11,900, derived from GGM with a 6.5% CoE (5-year average) and 21.4% FY25F ROE, implies an FV PBV of 5.2x. BBCA remains our top pick for its strong liquidity, resilient CoF, and solid asset quality. Risks to our view include further asset quality deterioration and continuous Rupiah depreciation.

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