---
endpoint: analytics
pattern: Financial Services
status: done
latency_ms: 395032
conversation_id: f75f1505-fd63-4f5f-9b8f-2abc17eba6f1
citations: 5
created: 2026-05-31 19:41:42Z
---

# Provide a one‑year narrative of Bank Central Asia, outlining how business performance, market conditions, and company actions shaped investor sentiment and valuation.

# Bank Central Asia (BBCA IJ) — One-Year Narrative (mid-2024 → 1Q26)

## Starting point: Best-in-class blue chip with a valuation that left little room for slippage (mid-2024)

Coming into the period, BCA was the consensus "best-in-class" Indonesian bank — a wholesale-led franchise with the cheapest CASA in the system, ~21% ROE and CAR above 27%. 2Q24 results (released July 2024) confirmed the operational story: 1H24 net profit Rp26.9tn (+11.2% YoY), with NIM expanding 20bps QoQ to 5.8% as excess liquidity was deployed into loans, and CASA-to-funding climbing to 82.2% [19]. The catch was the share price had already done a lot of the work: with the stock at Rp9,675 in late July 2024 trading at 4.3x 25CL PB, CLSA cut the call from Outperform to **Hold** (TP Rp10,820), flagging less than 10% total return [20].

By 1 October 2024, post a London/European NDR with c.40 investors, CLSA flipped the call back to **Outperform** with a higher Rp11,900 TP [18]. The thesis was twofold: (i) SME and consumer were re-positioned as the *medium-term growth engines* on top of the wholesale base — BCA had been quietly investing in SME human capital since ~2021, with c.90k SME debtors out of 32m customers and a clear "Investing for 2030" runway [9]; and (ii) BCA argued for *minimal margin volatility in 2025* despite the coming rate-cut cycle, supported by stable asset yields, ample liquidity and the lowest-cost CASA in the system [22]. Management also flagged room to step up the dividend in stages on the back of high capital and profitability [23].

## FY24 closed strongly, but management's 2025 messaging signalled a more difficult year ahead

FY24 net profit was Rp54.8tn (+12.8% YoY), in line with consensus, driven by 13.8% YoY consolidated loan growth, with corporate alone contributing roughly half of the 4Q24 expansion [17]. 4Q24 numbers tied this off neatly: gross loans Rp921.9tn, CASA ratio 81.5%, FY24 NIM 5.8% (vs FY23 5.5%), ROE 24.6%, gross NPL 1.8% [21]. Both reported and "bank-only" indicators marked the operational peak of the cycle.

But the tone shift in management's January 2025 guidance was the more important signal. The bank guided for *softer growth from a high base* and — critically — said the **focus for 2025 would be profitability (NIM) rather than volume**, because it perceived the operating environment as "more challenging" [17]. CLSA reiterated O-PF with a Rp12,100 TP at the time the stock traded near 3.2x PB 25CL.

## Tariffs, IDR and commodities — the macro overhang of early 2025

The first major sentiment hit came in March–April 2025 as US tariff escalation, IDR weakness and a softer commodity outlook compressed flows into Indonesian banks. CLSA's sector work showed direct loan exposure to US-bound exporters was small — **only ~1.8% of BCA's loan book** (and within that, debtors with >20% US sales were just 0.5% of total loans) [10]. Among the Big 4, BCA also had the lowest aggregate commodity exposure at **c.11% of loans** (palm 6.0%, coal/mining 3.1%, oil & gas 0.8%, nickel 0.9%) — vs Mandiri's 22% — which positioned the franchise as a defensive haven within the sector [11].

That defensiveness didn't save the share price short-term: by 23 April 2025, BCA was trading at Rp8,750 against a 12-month range of Rp10,950/7,775, with the stock down **10.3% absolute on a 12-month basis** (–13.7% in US$) [4] — a brutal reversal from the +19.5% 12-month gain it carried into October 2024. Market cap had fallen to US$62.1bn from a peak above US$84bn, against an unchanged Rp12,100 12-month target (+39% potential upside) [3].

## 1Q25 reset the operating bar — and confirmed margin discipline

1Q25 earnings, reported 23 April 2025, came in at Rp14.1tn — up c.10% YoY and 3% QoQ — driven by 12.6% YoY loan growth, stable margins and manageable provisions [1]. The granular picture:

- **NIM**: 5.8% in 1Q25 (in line with 5.7–5.8% guidance), 20bps lower QoQ vs 4Q24's 6.0%, but flat vs FY24. The driver was CASA growth (+6% QoQ, +8.3% YoY), which lifted the CASA ratio further. LDR slipped 2.3% QoQ to 76%, signalling still-ample liquidity.
- **Asset quality**: NPL flat YoY at 2.0%, but ex-textile NPLs were just 1.2–1.3%. LAR rose 70bps QoQ to 6.0% due to one mineral-related debtor moving into short-term restructuring. Cost of credit 50bps in 1Q25 vs 30bps FY25 guidance — front-loaded but maintained [1].
- **Cost discipline**: 1Q25 cost-to-income ratio of 34%; zero employee-growth plan for 2025 with most SME hiring already done [1].
- **Public deck cross-check**: BCA's own 1Q25 analyst deck confirmed NPAT rose 9.8% YoY on "solid operating performance," with PPOP up 9.9% YoY to Rp18.4tn [12].

Stock-specific risk now centred on a long-anticipated leadership transition: CLSA confirmed that incoming CEO **Hendra Lembong** (ex-deputy CEO) had passed the regulator's fit-and-proper test and would assume the CEO role effective **1 June 2025**, with prior CEO Jahja Setiaatmadja moving up to President Commissioner [2]. The handover was telegraphed and uncontroversial — but represented the most significant management change at BCA in over a decade and was repeatedly cited in CLSA's risk list (alongside Djarum Group ownership and competition in payments).

## Sector under liquidity stress — but BCA framed as the cleanest beneficiary (June 2025)

CLSA's 17 June 2025 sector note ("Hope floats on liquidity") captured the broader environment that shaped 2H25 expectations:

- **BI cut policy rate by 25bps to 5.5% on 22 May 2025** (50bps YTD), also cutting the PLM (liquidity macro-prudential) buffer by 1ppt and raising the foreign-funding cap RPLN from 30% to 35% — releasing an estimated Rp90tn into the system. BI's posture was explicitly an "opportunistic" rate-cut stance balancing IDR stability against growth [7].
- **Industry LDR ~90% with loan growth slowing**; BI cut its industry loan growth forecast to 8–11% from 11–13%. BCA's deposit growth (+5.6% YoY, +4.2% YTD as of Apr 2025) and Big-4-leading liquidity buffers (PLM 32.7%; LCR 300%+; NSFR 156%) left it uniquely positioned to grow without funding-cost pain.
- **CLSA's pecking order**: BCA top pick for the long term, with Mandiri **upgraded to HC O-PF** (highest-conviction) replacing BNI, which was downgraded to O-PF [5]. BCA's price stood at **Rp8,925 with TP Rp12,100 (+36% upside) at a US$68.4bn market cap** [6].

## Actual 2H25 results: profitability stayed solid; growth decelerated as guided

BCA's own quarterly decks for 2H25 confirmed management's "profitability over volume" pivot:

| Period | Consolidated NPAT | YoY | NIM (bank-only) | CASA/Funding | LDR | ROE |
|---|---|---|---|---|---|---|
| 1Q25 | Rp14.1tn | +9.8% | 5.8% | 82.9% | 76.1% | 26.2% |
| 1H25 | Rp29.0tn | +8.0% | 5.8% | 83.4% | 78.0% | 25.2% |
| 9M25 | (PPOP Rp56.6tn) | PPOP +7.9% | n/a | n/a | n/a | n/a |
| 1Q26 | Rp14.7tn | +3.8% | 5.4% | 85.2% | 74.1% | 25.1% |

- **1H25**: NPAT Rp29.0tn (+8.0% YoY); net interest income Rp42.5tn (+7.0%); fees & commissions +9.5%; CASA/funding stepped up to **83.4%** (from 82.2% in 1H24); CAR strengthened to 28.4%. Risk-Adjusted NIM eased to 5.3% from 5.4% as cost of credit doubled to 0.5% [13].
- **9M25**: Operating income Rp85.2tn (+6.9% YoY), NII Rp63.9tn (+5.2%), non-interest income +12.4%; **PPOP growth slowed to +7.9% YoY** [14].
- **1Q26**: NPAT Rp14.7tn (+3.8% YoY) — the **slowest growth print of the year-long cycle**. Headline NIM compressed to 5.4% (−40bps YoY, −20bps QoQ), cost of credit ticked to 0.6%, but **CASA/Funding reached an all-time high of 85.2%** and CAR was 27.0%. NPL 1.8%, LAR fell to 5.1% (from 6.0% in 1Q25) — asset quality actually improved despite the slowdown [15]. Industry data in the deck framed the deceleration: industry loan YoY growth slipped to 9.0% by Feb-26, with industry LDR drifting from 87.6% in 2024 to 83.7%, reflecting the broader liquidity rebuilding [16].

## Strategic posture remained the differentiator

Through the year, BCA's strategic narrative held together remarkably well: corporate loans (which still anchor c.46% of the book) drove the early growth burst in 4Q24/1Q25, with SME and consumer (auto, mortgages) layered as growth engines as guided in the 2024 NDR [9]. By 1Q26, corporate loans were Rp483.8tn (+9.1% YoY), with investment-loan utilisation continuing to outpace working capital — a sign of capex rebuilding in the underlying economy [16]. ESG efforts received its own dedicated CLSA note in November 2024, with BCA growing its sustainable financing portfolio and consistently rated one of the most trusted banks globally — though CLSA noted the investment community rarely rewards this in valuation.

## Valuation & sentiment trajectory

A summary of how the call/valuation arc evolved:

| Date | CLSA call | TP (Rp) | Implied P/B fwd | Stock context |
|---|---|---|---|---|
| Jul 2024 (post-2Q24) | **HOLD** (downgrade) | 10,820 | 4.3x 25CL PB | +10.7% 12M absolute [19] |
| Oct 2024 (post-NDR) | **O-PF** (upgrade) | 11,900 | 4.5x 25CL PB | +19.5% 12M absolute [8] |
| Jan 2025 (post-4Q24) | O-PF | 12,100 | 3.2x 25CL PB | -1.8% 1M, +0.0% 12M |
| Apr 2025 (post-1Q25) | O-PF | 12,100 | 3.5x 26CL PB | **-10.3% 12M absolute** [4] |
| Jun 2025 (sector) | **O-PF (top pick)** | 12,100 | ~3.4x 25CL PB | Stock Rp8,925; +36% upside [6] |

The story: BCA's *operating* franchise actually held up through the entire period — CASA expanded, capital deepened, asset quality improved into 1Q26 — but the *share price* derated through 2H24/1H25 on a combination of: (i) US tariff/IDR/commodity macro fears, (ii) the implied profit growth slowdown as management deliberately prioritised NIM over volume from FY25, and (iii) sector-wide foreign flow rotation away from Indonesian banks (US$200m net outflows in early Oct 2024 alone) [11]. By mid-2025, sentiment had reset to a level where CLSA again framed BCA as the cleanest balance sheet through a tight-liquidity sector, with c.36% upside to a TP that had been static at Rp12,100 since early 2025 [6].

The 1Q26 result — softer headline NPAT growth at +3.8% but with CASA hitting a record 85.2% and LAR improving — is the key validating data-point of management's "quality over quantity" pivot: the franchise re-tightened its liability advantage even as the sector slowed [15][16]. The narrative for the year ahead now hinges on whether NIM stabilises at the 5.4% level as BI's rate-cut cycle and PLM unwind feed through, and whether incoming CEO Hendra Lembong's tenure preserves the conservative, dividend-friendly capital posture that has been BCA's signature.

---

**Sources**
[1] Bank Central Asia — O-PF (Good earnings despite tough macro), CLSA, 23 Apr 2025 — 607956688LinqAlpha.PDF
[2] Bank Central Asia — O-PF (Good earnings despite tough macro), CLSA, 23 Apr 2025 — 607956688LinqAlpha.PDF
[3] Bank Central Asia — O-PF (Good earnings despite tough macro), CLSA, 23 Apr 2025 — 607956688LinqAlpha.PDF
[4] Bank Central Asia — O-PF (Good earnings despite tough macro), CLSA, 23 Apr 2025 — 607956688LinqAlpha.PDF
[5] Indonesian banks (Hope floats on liquidity), CLSA, 17 Jun 2025 — 607962177LinqAlpha.PDF
[6] Indonesian banks (Hope floats on liquidity), CLSA, 17 Jun 2025 — 607962177LinqAlpha.PDF
[7] Indonesian banks (Hope floats on liquidity), CLSA, 17 Jun 2025 — 607962177LinqAlpha.PDF
[8] Bank Central Asia — O-PF (Staying 'best-in-class'), CLSA, 1 Oct 2024 — 607940523LinqAlpha.PDF
[9] Bank Central Asia — O-PF (Staying 'best-in-class'), CLSA, 1 Oct 2024 — 607940523LinqAlpha.PDF
[10] Indonesian banks (Commodity and currency risk), CLSA, 16 Apr 2025 — 607956080LinqAlpha.PDF
[11] Indonesian banks (When the dust settles), CLSA, 8 Oct 2024 — 607940805LinqAlpha.PDF
[12] PT Bank Central Asia Tbk — Analyst Meeting 1Q25 slides, 23 Apr 2025
[13] PT Bank Central Asia Tbk — Analyst Meeting 1H25 slides, Jul 2025
[14] PT Bank Central Asia Tbk — Analyst Meeting 9M25 slides, Oct 2025
[15] PT Bank Central Asia Tbk — Analyst Meeting 1Q26 slides, Apr 2026
[16] PT Bank Central Asia Tbk — Analyst Meeting 1Q26 slides, Apr 2026
[17] Bank Central Asia — O-PF (A great close to the year), CLSA, 23 Jan 2025 — 607948915LinqAlpha.PDF
[18] Bank Central Asia — O-PF (Staying 'best-in-class'), CLSA, 1 Oct 2024 — 607940523LinqAlpha.PDF
[19] Bank Central Asia — HLD (Another solid quarter), CLSA, 24 Jul 2024 — 607934498LinqAlpha.PDF
[20] Bank Central Asia — HLD (Another solid quarter), CLSA, 24 Jul 2024 — 607934498LinqAlpha.PDF
[21] Bank Central Asia — O-PF (A great close to the year), CLSA, 23 Jan 2025 — 607948915LinqAlpha.PDF
[22] Bank Central Asia — O-PF (Staying 'best-in-class'), CLSA, 1 Oct 2024 — 607940523LinqAlpha.PDF
[23] Bank Central Asia — O-PF (Staying 'best-in-class'), CLSA, 1 Oct 2024 — 607940523LinqAlpha.PDF

## Citations

- [12] **PT Bank Central Asia Tbk Slide 1: Q1 2025 Earnings Call** · external
- [13] **PT Bank Central Asia Tbk Slide 1: Q2 2025 Earnings Call** · external
- [14] **PT Bank Central Asia Tbk Q3 2025 Earnings Call** · external
- [15] **PT Bank Central Asia Tbk, Q1 2026** · external
- [16] **PT Bank Central Asia Tbk, Q1 2026** · external

