BBCA released its 1Q25 results, with headline profit of IDR14.1tn (+3% q-q; +10% y-y) accounting for ~24% of our FY25F estimate. We attribute these resilient results primarily to stable funding costs, despite persistently tight liquidity in the banking system, as well as to a stable NIM driven by a strong transactional franchise and improved asset quality (which led to lower credit costs). BBCA delivered loan growth of +12% y-y, ahead of the banking sector’s growth. Notably, in the corporate and consumer segments, BBCA reported loan growth of ~14% y-y and ~11% y-y, respectively, both well ahead of the industry loan growth. In the SME segments, BBCA reported superior loan growth of ~13%, well ahead of the industry average for SMEs. BBCA’s loan utilization has been stable y-y, at 6.3% in 1Q25.
Other key points discussed during the results announcement included the potential for an increase in lending rates. Going into 2H25, management has suggested that loan repricing is highly likely to take place. However, they emphasized that lending rate repricing will be done prudently, with adjustments unlikely to be overly aggressive. This underscores our view that there are upside risks to major banks’ earnings, driven by improved loan pricing. Indeed, we believe that upward loan repricing reflects expectations of an elevated interest rate structure in Indonesia. These should mitigate tight liquidity in the banking system where funding costs are likely to remain elevated. Meanwhile, improved loan repricing would benefit major banks, including BBCA, in our view.
BBCA’s management also highlighted that the 32% reciprocal tariffs imposed by the US on Indonesia’s exports could affect industries such as furniture, apparel, frozen seafood and CPO. However, for BBCA, these industries only make up ~2% of the bank’s total book. Hence, it should have a minor impact on the bank. This reaffirms our recent assessments regarding the impact of tariffs on major banks, where we believe the effects should be manageable (and should pose limited earnings risks). In addition, management mentioned that the uptick in LAR (2%, +80bp q-q) and NPL (5.9%, +30bp q-q) in 1Q25 was due to a single borrower from the mineral industry and the fact that loan is undergoing a restructuring process. However, it highlights that this loan is still under “current-status” and has not been downgraded. The restructuring process is expected to be completed by May or June and things should normalize thereafter, according to management.
Post results, we reiterate our Buy rating on the stock with an unchanged TP of IDR12,600.
1Q25 results summary
1Q25 net interest income (NII) reached IDR21tn (-1.4% q-q; +6.9% y-y), accounting for ~24% of our FY25F estimate. This implies 1Q25 NIM of 6.1% (+10bp y-y / -20bp q-q), as the bank benefited from asset yield repricing, which more than offset a marginal increase in the cost of funds. Yields for risk-free earnings assets have been on the rise (e.g., SRBI (Bank Indonesia Rupiah Securities) , which yields ~6.5%). Going into 2H25F, we believe BBCA would benefit further from loan repricing, as we expect funding costs across the banking sector will continue to be on the rise, given that broad liquidity in the banking system remains extremely tight.
1Q25 PPOP reached IDR18.5tn (+7.6% q-q; +10% y-y), which represents ~24% of our FY25F estimate. Credit cost (CoC) was 50bp (+10bp y-y). As mentioned above, the increase in CoC was attributed to a single borrower being restructured, resulting in NPL and LAR standing at 2.0% and 5.9%, respectively.
On the balance sheet, BBCA reported loans of +2% q-q / +12% y-y and deposits of +5.3% q-q / +6.5% y-y, implying a healthy LDR of 76.4% (+400bp y-y). Despite strong TD growth, BBCA maintains one of the highest CASA ratios at 82.1% among major banks. This should enable it to keep competitive lending rates and cherry-pick quality borrowers, in our view. We believe these would be the main drivers for the bank’s elevated ROAA of 3.8% and ROAE of 22.2%, despite the already-elevated CAR of 27.4%.
Valuation and risks
We derive our TP of IDR12,600 using DuPont analysis, with key parameters as follows: a risk-free rate of 6.5%, an equity risk premium of 7.8%, beta of 0.8x and a CAR-adjusted ROAE of 24.5%. Our TP implies 5.4x FY25F P/B (vs current price valuation of 4.2x) and 26.0x FY25F P/E (vs current price valuation of 21.0x). Risks are worsening economic trends, tighter liquidity competition, and/or higher credit cost and opex growth.
Fig. 1: BBCA’s consolidated P&L
BBCA Consol P&L IDRbn
1Q24
4Q24
1Q25
Q-Q %
Y-Y %
2025F
vs. FY25F %
Int inc
22,986
24,615
24,395
(0.9)
6.1
101,775
24.0
Int exp
3,200
3,177
3,248
2.2
1.5
12,135
26.8
NII
19,786
21,438
21,146
(1.4)
6.9
89,640
23.6
Non-int inc
6,298
6,155
6,806
10.6
8.1
28,410
24.0
Op. inc
26,084
27,593
27,953
1.3
7.2
118,050
23.7
Non-int exp
9,289
10,434
9,486
(9.1)
2.1
39,440
24.1
PPOP
16,796
17,159
18,467
7.6
10.0
78,610
23.5
Prov
886
(333)
1,031
(410.0)
16.3
3,747
27.5
Net income
12,878
13,762
14,148
2.8
9.9
59,873
23.6
Loans
811,554
894,912
911,739
1.9
12.3
Deposits
1,120,557
1,133,612
1,193,361
5.3
6.5
- CASA
904,499
923,977
979,205
6.0
8.3
- Time deposits
216,058
209,635
214,156
2.2
(0.9)
Equities
227,162
262,641
246,325
(6.2)
8.4
Total assets
1,444,008
1,449,301
1,533,763
5.8
6.2
Source: Company data, Verdhana estimates
Fig. 2: BBCA’s 1Q25 y-y summary %
Source: Company data, Verdhana research
Fig. 3: BBCA’s loan breakdown
BBCA - Loan breakdown IDRbn
1Q24
2Q24
3Q24
4Q24
1Q25
Q-Q %
Y-Y %
Corporate
389,400
388,600
395,900
429,500
443,400
3.2
13.9
Commercial & SME
244,600
251,700
265,800
269,700
263,000
(2.5)
7.5
Consumer
202,700
210,200
216,500
223,800
225,700
0.8
11.3
Total
836,700
850,500
878,200
923,000
932,100
1.0
11.4
Consumer breakdown IDRbn
1Q24
2Q24
3Q24
4Q24
1Q25
Q-Q %
Y-Y %
Mortgage
121,700
126,900
130,400
135,500
135,300
(0.1)
11.2
Vehicles
59,800
62,100
64,100
65,300
67,100
2.8
12.2
Credit cards (and others)
20,200
21,100
21,900
22,900
23,300
1.7
15.3
Total
201,700
210,100
216,400
223,700
225,700
0.9
11.9
As % of total
1Q24
2Q24
3Q24
4Q24
1Q25
Corporate
46.5
45.7
45.1
46.5
47.6
Commercial & SME
29.2
29.6
30.3
29.2
28.2
Consumer
24.2
24.7
24.7
24.2
24.2
Total
100.0
100.0
100.0
100.0
100.0
Consumer loan breakdown (%)
1Q24
2Q24
3Q24
4Q24
1Q25
Mortgage
14.5
14.9
14.8
14.7
14.5
Vehicles
7.1
7.3
7.3
7.1
7.2
Credit cards (and others)
2.4
2.5
2.5
2.5
2.5
Total
24.1
24.7
24.6
24.2
24.2
Source: Company data, Verdhana research
Fig. 4: BBCA’s consolidated ratios
BBCA Consolidated Ratios
1Q24
4Q24
1Q25
Gross Yield (%)
6.9
7.3
7.0
Cost of funds (%)
1.1
1.1
1.1
Spread (%)
5.8
6.1
5.9
NIM %
6.0
6.3
6.1
Risk-adj NIM %
5.7
6.4
5.8
LDR %
72.4
78.9
76.4
Asset y-y
9.3
2.9
6.2
Assets q-q
2.5
1.1
5.8
Loans y-y
17.0
13.6
12.3
Loans q-q
3.1
5.2
1.9
Loan ytd
3.1
13.6
1.9
Deposits y-y
7.9
2.9
6.5
Deposits q-q
1.7
0.7
5.3
Deposits ytd
1.7
2.9
5.3
CASA %
80.7
81.5
82.1
CIR %
35.6
37.8
33.9
CAR %
26.4
29.1
27.4
NPL %
1.9
1.7
2.0
LLR %
4.3
3.7
3.7
ROAE %
21.9
21.2
22.2
ROAA %
3.6
3.8
3.8
CoC %
0.4
(0.2)
0.5
Loan-to-CASA %
90
97
93
NPL
1.9
1.7
2.0
NPL cov %
226.7
216.1
186.9
LAR %
6.3
5.1
5.9
LAR Cov %
67.3
73.1
63.2
Source: Company data, Verdhana research
Fig. 5: BBCA’s LAR
BBCA LAR IDRbn
1Q24
2Q24
3Q24
4Q24
1Q25
Q-Q %
Y-Y %
Current - Restructured loans
16,801
13,227
12,964
11,897
16,786
41.1
(0.1)
Special mention
19,317
20,844
19,804
18,407
18,700
1.6
(3.2)
Substandard
2,523
1,395
1,296
1,106
1,429
29.1
(43.4)
Doubtful
1,524
1,927
1,109
1,240
3,145
153.6
106.4
Loss
11,202
14,306
15,081
13,152
13,575
3.2
21.2
NPLs
15,250
17,628
17,486
15,498
18,148
17.1
19.0
LAR
51,368
51,698
50,253
45,803
53,634
17.1
4.4
LAR %
6.1
6.1
5.7
5.0
5.7
NPL %
1.8
2.1
2.0
1.7
1.9
NPL coverage %
226.7
195.9
205.6
216.1
186.9
LAR cov %
67.3
66.8
71.6
73.1
63.2
Restructured loans (IDRbn)
Current
16,801
13,227
12,964
11,897
16,786
41.1
(0.1)
Special mention
8,184
7,670
7,665
6,861
6,346
(7.5)
(22.5)
Substandard
1,976
468
399
387
520
34.3
(73.7)
Doubtful
561
642
196
222
740
234.1
32.0
Loss
8,529
11,139
11,225
9,420
9,518
1.0
11.6
Restructured loans as % of total loans
4.44
4.02
3.81
3.22
3.72
Restructured loans (IDRbn)
36,052
33,146
32,448
28,787
33,910
17.8
(5.9)
Source: Company data, Verdhana research
Fig. 6: BBCA — 12-month moving average (MMA) Loan vs NII growth %
Source: Company data, Verdhana research
Fig. 7: BBCA — LLR vs 12MMA WO %
Source: Company data, Verdhana research
Fig. 8: BBCA — 12MMA CoC vs 12MMA WO %
Source: Company data, Verdhana research
INVESTMENT RATINGS A rating of ‘Buy’, indicates that the analyst expects the stock to outperform the Benchmark over the next 12 months. A rating of ‘Neutral’, indicates that the analyst expects the stock to perform in line with the Benchmark over the next 12 months. A rating of ‘Reduce’, indicates that the analyst expects the stock to underperform the Benchmark over the next 12 months. A rating of ‘Suspended’, indicates that the rating, target price, and estimates have been suspended temporarily to comply with applicable regulations and/or firm policies. Securities and/or companies that are labelled as ‘Not Rated’ or ‘No Rating’ are not in regular research coverage. Benchmark is Indonesia Composite Index (‘IDX Composite’). A ‘Target Price’, if discussed, indicates the analyst’s forecast for the share price with a 12-month time horizon, reflecting in part of the analyst’s estimates for the company’s earnings, and may be impeded by general market and macroeconomic trends, and by other risks related to the company or the market in general.
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