---
endpoint: analytics
pattern: Financial Services
status: done
latency_ms: 185998
conversation_id: e468f15a-3fb6-40d9-8bce-cc4ef3cf8eeb
citations: 13
created: 2026-05-31 22:06:00Z
---

# How does Bank Central Asia’s valuation compare to peers, and what justifies its premium/discount?

# Bank Central Asia (BBCA IJ) — Valuation vs Indonesian Bank Peers

**Source frame**: CLSA Indonesian Banks sector note "Hope floats on liquidity" (17 June 2025, analyst Sarina Lesmina, CFA). The corpus's most recent CLSA view on Indonesian banks. No more current CLSA sector outlook is indexed; this is the freshest available coverage [1].

---

## 1. The Headline Premium — BCA Trades 2-4x the Multiple of State-Owned Peers

CLSA's Big 4 + sector valuation matrix (25CL forward basis):

| Bank | Ticker | Mcap (US$bn) | Rec | Price (Rp) | TP (Rp) | **PB 25CL** | **ROE 25CL** | EPSg 25CL | Div Yld 25CL | TSR |
|------|--------|--------------|-----|-----------|---------|-------------|--------------|-----------|--------------|-----|
| **BCA** | BBCA IJ | 68.4 | O-PF | 8,925 | 12,100 | **3.84x** | **21%** | 5% | 3.4% | 39% |
| Mandiri | BMRI IJ | 29.6 | HC O-PF | 5,150 | 6,750 | 1.65x | 20% | 1% | 9.1% | 40% |
| BRI | BBRI IJ | 37.2 | O-PF | 3,990 | 4,750 | 1.88x | 18% | (5%) | 8.6% | 28% |
| BNI | BBNI IJ | 10.4 | O-PF | 4,400 | 5,700 | 0.97x | 14% | 5% | 8.5% | 38% |
| BTN | BBTN IJ | 1.0 | O-PF | 1,150 | 1,450 | 0.47x | 11% | 7% | 4.1% | 30% |
| BTPN Syariah | BTPS IJ | 0.6 | HLD | 1,295 | 920 | 1.01x | 12% | 8% | 5.4% | (24%) |
| Bank Jago | ARTO IJ | 1.5 | O-PF | 1,700 | 2,000 | 2.68x | 3% | 115% | 0.0% | 18% |

Source: CLSA, 17-Jun-2025 [1]. BCA trades at a **~2.0x premium to BRI** (1.88x), **~2.3x to Mandiri** (1.65x), and **~4.0x to BNI** (0.97x) on 25CL book.

**Versus its own history**: BCA's PB band has a long-run mean of **3.78x** with +1sd at 4.35x and −1sd at 3.21x. Current 3.84x is essentially **trading at historical mean** — premium to peers but NOT stretched against its own range [5]. CLSA's target multiple is **5.2x 25CL PB** (above +1sd), implying ~36% upside to Rp12,100 [2][1]. CLSA also notes: "BCA is now trading at historical mean PB" [13].

---

## 2. CLSA's Justification for the Premium — Four Linked Pillars

CLSA's verdict is explicit: "BCA's valuation is **ahead of those of its major Indonesian peers given prudent risk management and a strong transaction franchise. Hence, we believe this premium is justified.**" [2]

### Pillar 1 — Highest, Most Durable ROE in the Group

| Bank | ROE FY24 | ROE 25CL |
|------|----------|----------|
| **BCA** | **24.4%** | 21% |
| Mandiri | 21.5% | 20% |
| BRI | 21.2% | 18% |
| BNI | 14.3% | 14% |
| BTPN Syariah | 12.8% | 12% |
| BTN | 9.6% | 11% |

Source: CLSA, Fig 48 [3] + valuation matrix [1]. BCA delivered the highest FY24 ROE in the sector and CLSA models a **"sustainable 21% ROE over decades"** in the target-price derivation — a structural through-cycle assumption, not a cyclical peak [2]. By contrast, CLSA only credits BRI with 18.5% sustainable, Mandiri 19%, BNI 17% in their respective target-price models [9][8][10].

### Pillar 2 — The Funding-Cost Moat (CASA / Cost of Savings)

This is the single most cited reason for BCA's premium:
- **CASA ratio 82% in 1Q25** — highest in Big 4. Savings = 60% of CASA. BRI is at 66% CASA (lowest among Big 4) [4].
- **Cost of savings: BCA 0.09–0.12% across FY22–1Q25** — a fraction of peers:

| Bank | FY22 | FY23 | FY24 | 1Q25 |
|------|------|------|------|------|
| **BCA** | **0.05%** | **0.09%** | **0.09%** | **0.12%** |
| BRI | 0.23% | 0.25% | 0.30% | 0.33% |
| Mandiri | 0.49% | 0.44% | 0.43% | 0.43% |
| BNI | 0.62% | 0.74% | 0.79% | 1.00% |

Source: CLSA, Fig 26 [7]. BCA pays roughly **1/3 of Mandiri's** and **1/8 of BNI's** cost of savings. In a tight-liquidity Indonesian banking system — a key 2025 theme in the note where CLSA expects cost of funds to remain elevated into 2Q25 [11] — this funding structure compounds into permanent NIM and ROE advantage. CLSA writes: "BCA is the benchmark" for other banks on CASA [4].

### Pillar 3 — Lowest Cost of Credit (Asset Quality)

| Bank | FY24 CoC | 1Q25 CoC | 25CL CoC |
|------|----------|----------|----------|
| **BCA** | **0.30%** | **0.50%** | **0.30%** |
| Mandiri | 0.79% | 0.88% | 1.11% |
| BNI | 1.10% | 0.90% | 1.10% |
| BRI | 3.23% | 3.53% | 3.20% |

Source: CLSA, Fig 33 [12]. BCA's cost of credit is **~3-10x lower** than state-owned peers — a direct expression of underwriting discipline and the lower-risk corporate/consumer mix. CLSA describes BCA as a "**super prudent bank** that results in very stable profit growth versus other banks" [2].

### Pillar 4 — Earnings Resilience (Lower Cyclical Drawdown)

| Bank (Rp tn NP) | 2023 | 2024 | 25CL | 2024 YoY | 25CL YoY |
|-----------------|------|------|------|----------|----------|
| **BCA** | 48.6 | 54.8 | 57.6 | **+12.7%** | **+5.1%** |
| BRI | 60.1 | 60.2 | 57.1 | +0.1% | **(5.1%)** |
| Mandiri | 55.1 | 55.8 | 56.1 | +1.3% | +0.5% |
| BNI | 20.9 | 21.5 | 22.6 | +2.7% | +5.3% |

Source: CLSA, Fig 38 [13]. BCA is the **only Big 4 bank delivering positive earnings growth in both 2024 and 25CL** — BRI is projected to decline ~5% as it absorbs micro-SME asset-quality issues. This earnings stability is the empirical proof of CLSA's "stable profit growth versus other banks" thesis underpinning the premium [2].

**Defensive in liquidity squeeze**: BCA has the lowest FX-loan exposure (5%) versus BNI (21%) and Mandiri (18%) [11] — less SOFR-linked yield pressure when global rates fall and lower funding-mismatch risk.

---

## 3. Why Peers Trade at a Discount — CLSA's Own Words

CLSA's target-price footnotes make the rationale for *each peer's* discount explicit:

- **Mandiri (1.65x current vs 2.64x fair-value PB)**: CLSA applies an **18% discount** to fair value due to "liquidity conditions, policies surrounding SOE banks, and **execution risk in maintaining a 19-20% sustainable ROE given its transformation started only a few years ago**" [8]. Plus a structural funding gap: "cost of funds among the Big 4 banks is lowest after BCA, but still shows a **large gap with BCA**" [13].
- **BRI (1.88x current vs 2.83x fair-value PB)**: CLSA applies a **23% discount** to fair value to reflect "**execution risk in assuring that current issues with micro asset quality are resolved**" — the 3.2% cost of credit is the live wound [9].
- **BNI (0.97x current vs 1.88x fair-value PB)**: Even larger discount, reflecting "**uncertainty surrounding government policies towards SOE banks, and execution risk in raising ROE to the aspired 17-18%**" [10]. Note BNI's ROE is only 14% — the lowest in Big 4 — directly justifying its sub-1.0x PB.

So peers are not just "cheaper because BCA is expensive" — each carries an identifiable, named CLSA discount tied to either execution risk, asset quality, or SOE policy uncertainty. **BCA carries none of these specific discounts in the model.**

---

## 4. Risks to the Premium — What Could Compress It

CLSA flags four BCA-specific risks that could narrow the gap [6]:

1. **Competitive encroachment** — "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**." This is the central long-term re-rating risk: Mandiri's "value chain" ecosystem strategy is explicitly framed as trying to close the transaction-franchise gap with BCA [13].
2. **Policy risk** — Indonesian government policy changes and global uncertainty affecting earnings and multiples.
3. **Political/legal stability** in Indonesia, which affects the multiple paid for BCA shares.
4. **Operating/credit risks** in day-to-day operations; majority-control by the Djarum Group could lead to management changes.

---

## 5. Bottom Line

CLSA's framework: BCA's **~2x PB premium to BRI/Mandiri and ~4x to BNI** is justified by a stack of *quantitatively durable* differences — not by sentiment:

- **Quality of earnings**: 21% sustainable ROE vs 14–20% at peers, with ~12% NP growth in 2024 vs flat-to-down peers [3][13].
- **Funding moat**: 82% CASA and 0.09% cost of savings — multiples lower than every peer; especially defensive when system liquidity tightens [4][7].
- **Asset quality**: 0.30% cost of credit is 3–10x below SOE peers and explains a large share of the ROE differential [12].
- **No SOE policy overhang**: Peers carry 18–23% CLSA-applied discounts to their *own* Gordon-growth fair values; BCA does not [8][9][10].

The premium is *justified* in CLSA's framing because BCA at 3.84x trades at its **historical mean** and embeds a 21% through-cycle ROE that the data continues to validate [5][2]. CLSA's 5.2x target PB (Rp12,100, +36% upside) implies the multiple still has room to expand if the franchise holds — which is why the call remains **O-PF** and CLSA describes BCA as "the **safest and solid pick** for the longer term" [13].

The risk to that thesis is gradual rather than acute: not a re-rating event but a slow erosion of BCA's transaction-franchise lead as Mandiri's value-chain strategy and the SOE banks' digital offerings catch up [6].

---

**Sources**
[1] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — Valuation matrix, Fig 48 — 607962177LinqAlpha.PDF
[2] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — BCA investment thesis, catalysts & valuation rationale — 607962177LinqAlpha.PDF
[3] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — Fig 48 ROE FY24 comparison — 607962177LinqAlpha.PDF
[4] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — CASA / "BCA is the benchmark" — 607962177LinqAlpha.PDF
[5] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — BCA PB band (mean 3.78x, +1sd 4.35x) — 607962177LinqAlpha.PDF
[6] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — BCA investment risks — 607962177LinqAlpha.PDF
[7] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — Cost-of-savings table by bank — 607962177LinqAlpha.PDF
[8] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — Mandiri valuation details — 607962177LinqAlpha.PDF
[9] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — BRI valuation details (23% discount to fair value) — 607962177LinqAlpha.PDF
[10] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — BNI valuation details — 607962177LinqAlpha.PDF
[11] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — FX-loan exposure (BCA 5% vs BNI 21%, Mandiri 18%) — 607962177LinqAlpha.PDF
[12] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — Fig 33 cost-of-credit trend — 607962177LinqAlpha.PDF
[13] *Indonesian banks (Hope floats on liquidity)* — CLSA (17 Jun 2025) — Fig 38 earnings trend / BCA "safest and solid pick" — 607962177LinqAlpha.PDF

## Citations

- [1] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [2] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [3] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [4] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [5] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [6] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [7] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [8] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [9] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [10] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [11] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [12] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>
- [13] **607962177LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/06/607962177LinqAlpha.PDF>

