---
endpoint: analytics
pattern: Financial Services
status: done
latency_ms: 253453
conversation_id: 641e10d2-2493-43ba-af65-6681d1ad47bd
citations: 0
created: 2026-05-31 19:11:39Z
---

# What’s the bull case bear case for Bank Central Asia?

# Bank Central Asia (BBCA IJ) — Bull / Bear Case

**Sources used:** CLSA company note "Bank Central Asia – O-PF (Good earnings despite tough macro)" dated 23-Apr-2025 + CLSA sector note "Indonesian banks – Hope floats on liquidity" dated 17-Jun-2025. Both authored by Sarina Lesmina, CFA. Rating **O-PF, TP Rp12,100** (latest TP cut path: 11,300 Dec24 → 10,500 Feb25 → 9,800 Apr25 → 8,500 May25, then re-set to 12,100 in Jun25 note) [15]. CLSA's framing on the franchise is "BCA remains our most solid pick for the longer term" — i.e. the structural bull is intact, the bear is largely macro/cyclical/valuation [8][20].

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## Snapshot

| Item | Value | Source |
|---|---|---|
| Price (17-Jun-25 sector note) | Rp8,925 | CLSA [11] |
| Target Price | Rp12,100 | CLSA [11] |
| Upside | ~36% | CLSA [11] |
| Rating | O-PF | CLSA [11] |
| Mcap | US$68.4bn | CLSA [11] |
| 25CL ROE | 21.0% | CLSA [19] |
| 25CL PB (CLSA fair value) | 5.2x (3.84x at market) | CLSA [14][11] |
| 25CL EPS growth (CLSA) | +5.1% | CLSA [19] |
| Dividend Yield 25CL / 26CL | 3.4% / 3.6% | CLSA [11] |

---

## BULL CASE

### 1. Franchise quality — the structural moat
- **Wholesale + consumer franchise with price leadership and "super prudent" management** that produces stable profit growth and a **sustainable ~21% ROE over decades** [1]. CLSA's FY24 ROE comp shows BCA at **24.4%, the highest among Indonesian Big-4 banks** (Mandiri 21.5%, BRI 21.2%, BNI 14.3%) [12].
- **Best-in-class deposit franchise.** CASA ratio **82.1% in 1Q25** (vs sector well below 70%), savings is ~60% of CASA, and cost of savings is materially lower than peers — BCA is explicitly described as **"the benchmark"** for the sector on low-cost funding [10][13]. 1Q25 CASA grew 8.3% YoY and CIR was a sector-leading 34.4% [5][13].

### 2. Liquidity fortress — most defensible in a tight system
- CLSA: **"BCA remains the most liquid big bank from all metrics: LDR, LCR and NSFR. The bank's LCR and NSFR ratios of 300% and 156%, respectively, are well above peers and threshold (100%)"** [9].
- 1Q25 LDR only **76.1%** vs Mandiri 92.5%, BNI 93.3%, BRI 86.6% — i.e. BCA has explicit headroom to grow loans while peers are throttled [13]. PLM **32.7%** (vs Mandiri 16%, BNI 15%, BRI 11%) [9 sector — see PLM/RPLN figure].
- In a sector where the constraint is system-wide liquidity (Big-4 LDR ~90%, system loan growth slowing to 8.9% YoY), BCA's positioning is the inverse of the sector's problem [20].

### 3. Earnings resilience through a tough macro
- **1Q25 net profit Rp14.1tn, +10% YoY / +3% QoQ**, hitting **24.4% of CLSA FY25 / 24% of Bloomberg consensus** — i.e. trending in-line/slightly ahead [3].
- Loans **+12.6% YoY / +2% QoQ**, corporate-led with consumer (notably auto) supporting [4]. 2025 guidance reiterated: NIM 5.7–5.8%, loan growth 6–8%, CoC 30bps, CIR 33–34%, LAR 5.2–5.5% [7].
- **NIM 5.8% in 1Q25, stable vs FY24** despite the rate environment, driven by CASA expansion. CLSA models stable 25CL NIM and notes "BCA having no liquidity issue" gives it pricing flexibility peers don't have [5].
- CoC: **30bps FY guidance maintained** despite some 1Q25 front-loading; NPL flat YoY at 2.0%, **ex-textile NPLs only 1.2–1.3%** [5].

### 4. Margin defense playbook is working
- Among Big-4, BCA has by far the **lowest FX loan exposure (5% vs BNI 21%, Mandiri 18%)**, insulating it from SOFR-linked yield compression as global rates fall [sector note]. BCA's NIM modelled at 5.8% 25CL → 5.6% 26CL, vs BNI gapping from 4.2% to 4.0%+ [17].
- **Lowest CoC in the system**: BCA 1Q25 CoC 0.50% vs Mandiri 0.88%, BNI 0.90%, BRI 3.53% [18]. This translates to highest-quality earnings stream.

### 5. Digital leadership + capital optionality
- 86% of investment transactions are now online (+23% YoY), ~63% of accounts opened online in 1Q25 — myBCA / BCA mobile drive a defensible transactional moat [3].
- **CAR 26.6% in 1Q25 (Tier 1 CAR 28.1% FY24, modelled 29.4% 25CL)** — heavy capital cushion to fund loan growth and lift payout. Payout ratio scaling from 51.9% (23A) to **64.2% / 63.9% / 64.0% (25/26/27CL)** [19].
- New CEO transition is benign: **Hendra Lembong (ex-Deputy CEO)** passed fit-and-proper, effective 1 June 2025; ex-CEO Jahja Setiaatmadja moved up to President Commissioner — i.e. internal continuity [7].

### 6. Valuation has de-rated to historical mean
- CLSA: **"BCA trades at 3.5x PB 26CL – this is below the historical mean"** [6]. Sector-comp table puts BCA at 3.84x PB 25CL with 21% ROE — premium is justified by franchise quality [11][14].
- CLSA valuation: 25CL PB 5.2x fair value (Gordon: 21% ROE, 7.5% Rf, 5% MRP, β 0.84, g 9.5%) → TP Rp12,100, **~36% upside** [14][11].

---

## BEAR CASE

### 1. Earnings growth slowdown — the de-rating signal
- 25CL net profit growth modelled only **+5.1% YoY** (vs +12.7% in 24A and +19.4% in 23A) — i.e. the structural compounder is decelerating sharply [19]. EPS growth 5.1% 25CL, 7.9% 26CL [19].
- TP path tells the story of street downgrades through this slowdown: **11,300 (Dec24) → 10,500 (Feb25) → 9,800 (Apr25) → 8,500 (May25)** before the Jun25 reset to 12,100 [15]. Sentiment has been one-way negative for 6 months.
- Share price **-10.3% absolute / -13.7% in US$ on a 12M basis** to 23-Apr-25, reflecting the de-rating [report header in BBCA-note].

### 2. Macro / system-liquidity bear
- Sector context: **tight liquidity** — industry LDR ~90%, loan growth moderating to ~8.9% YoY, funding growth soft at 4.55% YoY. BI cut industry loan-growth forecast to 8–11% from 11–13% [20]. The system's growth ceiling has come down and BCA is not immune — 25CL loan growth cut to **7.8%** (from prior 8.6%) [BBCA note key assumptions].
- 2Q25 NIM expected at-best flattish QoQ for the system; cost of funds expected to stay elevated through 2Q25 — though BCA has the lowest exposure to this [sector commentary].

### 3. Competitive threat to the payments / transactional moat
- The most-cited risk in CLSA's own note: **"BCA has benefited from a first-mover position in domestic payments and settlement. As competitor banks (namely the top-three state banks) ramp up their offerings here, there is a risk that the premium paid for such a franchise diminishes over time"** [2].
- State banks (Mandiri, BRI, BNI) are now explicitly trying to **build transactional franchises "to get closer to BCA"** — Mandiri's HC O-PF upgrade is partly built on this thesis, which is the same as saying the BCA-premium gap is targeted by competition [sector framing].

### 4. Asset-quality watchpoints
- **Loan-at-risk (LAR) rose 70bps QoQ to 6.0%** in 1Q25 due to a mineral-related debtor that moved into short-term restructuring [5]. Within guided range (5.2–5.5% — i.e. **currently above guidance**) and BCA expects improvement from 2Q25, but this is the clearest near-term blemish.
- Textile portfolio carried separately; ex-textile NPL only 1.2–1.3% but the existence of a textile carve-out hints at idiosyncratic stressed pockets [5].
- 1Q25 NPL **2.0%** vs 1.8% in 4Q24 (+20bps QoQ); CoC front-loaded at 50bps in 1Q25 vs 30bps FY guide [5][13].

### 5. Concentration / governance risk
- **Djarum Group (Hartono family) owns 54.9% via Dwimuria** — majority-controlled, and "could make changes to management" is an explicit CLSA risk [2]. While Djarum has been a hands-off, value-accretive owner historically, the legal/political environment in Indonesia means a stroke-of-the-pen risk exists.
- Other CLSA-cited risks: **policy changes** to bank regulation, **global uncertainty**, **Indonesian political and legal risks** affecting earnings and the multiple investors will pay [2].

### 6. Valuation premium is a coiled spring in either direction
- BCA trades at a **massive premium**: 3.84x PB 25CL vs Mandiri 1.65x, BRI 1.88x, BNI 0.97x [11]. If franchise quality is questioned (see point 3) or ROE slips below 21%, the de-rating is mechanically larger than peers.
- CLSA's TSR/upside framework already shows lower **TSR 39%** for BCA vs Mandiri 40% / BNI 38%, with **dividend yield 3.4% (25CL)** the lowest of Big-4 (BRI 8.6%, Mandiri 9.1%, BNI 8.5%) [11]. For yield-chasing or rate-cut-play investors, BCA is the worst Big-4 vehicle.
- "Below historical mean" cuts both ways — implies the franchise is no longer commanding the historical premium, which is a sentiment red-flag if growth doesn't reaccelerate [6].

### 7. CEO transition risk (modest)
- New CEO Hendra Lembong effective 1 June 2025 — though an internal candidate, any CEO change inherently introduces strategic-direction risk in a bank where management continuity has been a core part of the premium [7].

---

## Synthesis — CLSA's net call

CLSA's posture is **net-bullish** — "**BCA remains our most solid pick for the longer term**" [8][20]. The thesis is structural (franchise, CASA, capital, ROE, liquidity headroom) [1][9][10], and the bear case is largely **cyclical** (slowing earnings) and **valuation** (premium relative to peers, dividend yield the lowest of Big-4) [19][11]. Two genuine structural concerns: **state-bank competition eroding the payments-franchise premium** [2], and **Djarum's controlling stake** [2].

The mechanical risk-reward: ~36% upside to Rp12,100 at a fair-value PB of 5.2x [11][14], against a base case of single-digit earnings growth (5.1% 25CL, 7.9% 26CL) and the cleanest balance sheet in the sector to ride out tight system liquidity [19][9][20].

---
**Sources**
[1] CLSA — Bank Central Asia - O-PF (Good earnings despite tough macro), 23-Apr-2025 — 607956688LinqAlpha.PDF (Investment thesis)
[2] CLSA — Indonesian banks (Hope floats on liquidity), 17-Jun-2025 — 607962177LinqAlpha.PDF (BCA risks, ch.96)
[3] CLSA — Bank Central Asia - O-PF, 23-Apr-2025 (1Q25 earnings overview)
[4] CLSA — Bank Central Asia - O-PF, 23-Apr-2025 (Loans growth)
[5] CLSA — Bank Central Asia - O-PF, 23-Apr-2025 (NIM / NPL / CoC commentary)
[6] CLSA — Bank Central Asia - O-PF, 23-Apr-2025 (Maintain O-PF, valuation vs historical)
[7] CLSA — Bank Central Asia - O-PF, 23-Apr-2025 (New CEO Hendra Lembong, FY25 guidance)
[8] CLSA — Indonesian banks (Hope floats on liquidity), 17-Jun-2025 (Sector executive summary)
[9] CLSA — Indonesian banks, 17-Jun-2025 (LCR/NSFR comparison, BCA fortress liquidity)
[10] CLSA — Indonesian banks, 17-Jun-2025 (CASA / savings benchmark commentary)
[11] CLSA — Indonesian banks, 17-Jun-2025 (Valuation matrix — Big-4 comp table)
[12] CLSA — Indonesian banks, 17-Jun-2025 (FY24 ROE league table, Figure 48)
[13] CLSA — Bank Central Asia - O-PF, 23-Apr-2025 (1Q25 result summary table)
[14] CLSA — Bank Central Asia - O-PF, 23-Apr-2025 (Valuation details — Gordon growth, 5.2x PB)
[15] CLSA — Indonesian banks, 17-Jun-2025 (BCA recommendation history / TP path)
[16] CLSA — Indonesian banks, 17-Jun-2025 (Sector earnings trend table)
[17] CLSA — Indonesian banks, 17-Jun-2025 (NIM outlook — Big-4 + smaller banks)
[18] CLSA — Indonesian banks, 17-Jun-2025 (Cost-of-credit table — Big-4)
[19] CLSA — Bank Central Asia - O-PF, 23-Apr-2025 (Financials at a glance — 23A–27CL)
[20] CLSA — Indonesian banks, 17-Jun-2025 (Big-4 sector framing — central bank role)

*Note on news/freshness: no substantive non-CLSA news flow on BBCA returned for the Mar–May 2026 window (MT Newswires: 0 hits; StreetAccount: only 52-week-high/low aggregation summaries). CLSA corpus's latest BBCA-specific call is Apr-2025 (standalone note) refreshed by the Jun-2025 sector note — these are the most current sources in scope.*

