BBCA - Optimist to pursue loan channeled target

Bank Central Asia (BBCA) aiming loan growth to reach within the range of 10%-12% this year. Historically, 1Q loan channeled is weaker compared to the remaining period of the year. As of Mar ’23 the bank posted total loan at IDR713.8 tn or 12.0% yoy and according to BBCA the growth remain on track in the period of April ‘23. Mortgage loan will be optimized as the segment contributed significantly to the total growth, aside from BBCA’s plan to strengthened SME’s loan. (Source : Kontan). Comment : We like BBCA’s 1Q23 result, whereas earnings grew strongly by 43.0% yoy, despite weaken in qoq period which drop 2.1% qoq. PATMI at 11.5 tn was approximately 25.5% of our net profit ‘23F for BBCA and beat our expectation by around 3.73%. We expect BBCA’s ‘23F earnings will be driven by 13.33% yoy of net interest income growth and 12.2% yoy growth in PPOP, while loan channeled could reach 10% yoy in our view, or within the low boundaries of BBCA’s management guidance.