---
endpoint: analytics
pattern: Financial Services
status: done
latency_ms: 175762
conversation_id: bd926763-9eb4-4beb-9270-68a44b6ea26b
citations: 12
created: 2026-05-31 21:59:05Z
---

# What is Bank Central Asia’s core business franchise and the key components of its operating model?

# Bank Central Asia (BBCA IJ) — Core Franchise & Operating Model

## 1. Investment Thesis Framing (CLSA)

CLSA characterizes BBCA's franchise in a single line that has been carried unchanged across multiple notes:

> "BCA has a strong franchise in wholesale and consumer banking. It is a price leader and known to be a super prudent bank that results in a very stable profit growth (versus other banks), and sustainable 21% ROE over decades. The bank is also a leader in innovation (notably on the digital side). The bank also has strong capital to support future loan growth." [1]

The premium valuation (5.2x 25CL PB on a Gordon-growth model) is explicitly attributed to "prudent risk management and a strong transaction franchise" — i.e., the operating model itself is the source of the multiple, not cyclical earnings. [2]

---

## 2. Core Business Franchise — Three Pillars

### Pillar A — Transaction Banking / CASA Engine (the structural moat)

BBCA's defining franchise is its **transaction banking and low-cost deposit (CASA) engine**, not lending. Management's own framing is consistent on this point:

> "BCA continues to strengthen its transaction banking franchise, with third-party funds growing 10.2% to Rp1,249.0 trillion as of December 2025. Current and savings accounts (CASA) remained the largest contributor, reaching Rp1,045.2 trillion, or 83.7% of total third-party funds." [10]

Key franchise metrics (FY25 disclosures):

| Metric | BBCA FY25 | Industry FY25 |
|---|---|---|
| CASA / Third-Party Funds | **83.7%** | 62.2% |
| CASA market share | **16.9%** | — |
| LDR | 76.8% | 84.0% |
| CAR | 29.8% | — |
| ROA / ROE | 3.9% / 23.3% | — |

The CASA gap vs. industry (≈21 pts) is the single most important driver of BBCA's structurally low cost of funds, and is what allows it to be the system "price leader" without sacrificing NIM. [10]

The franchise is anchored in customer numbers and transaction velocity, not branch density:
- **>34 million customers** (up 23% in 3 years), >43 million accounts. [10][11]
- **Mobile + internet banking = ~99% of total transactions** in FY25. [10]

### Pillar B — Diversified Lending Book

The loan portfolio is intentionally balanced across segments — there is no single concentration that exceeds ~half the book, and asset quality is uniform across segments at ~2% NPL.

| Segment | 1Q25 (Rp tn) | % of Loans | YoY | 1Q25 NPL (Bank-only) |
|---|---|---|---|---|
| Corporate | 443 | **47%** | +13.9% | 1.7% |
| Commercial | 137 | 15% | +9.7% | 2.9% |
| SME | 125 | 13% | +12.8% | 2.3% |
| Consumer | 226 | 24% | +12.0% | 1.9% |
| Sharia | 11 | 1% | +18.3% | 1.5% |
| **Total** | **941** | **100%** | **+12.6%** | **2.0%** |

[4]

Within the consumer book (24% of total loans), the mix is mortgage-heavy with an auto-financing engine:

| Consumer sub-segment | 1Q25 (Rp tn) | % of Consumer | YoY |
|---|---|---|---|
| Mortgage | 135.3 | 60% | +10.4% |
| Vehicle | 67.1 | 30% | +12.2% |
| Credit cards & others | 23.3 | 10% | +13.7% |

[5]

### Pillar C — Wealth Management & Bancassurance Franchise

A growing fee/AUM layer leverages the same customer base:

> "A Leading Franchise in Wealth Management. BCA is one of leading providers for onshore products. Strong distribution via branches and online channel. BCA has been recognized as one of top sellers of Retail Government Bonds." [3]

Investment AUM (bonds + mutual funds) reached **Rp279tn (+33% YoY)** with government bonds 94% of AUM and 86% of investment transactions executed online. [3]

---

## 3. Operating Model — Key Components

### Component 1: Low-Cost Deposit Gathering (the funding engine)

The operating model starts with the deposit side, not the loan side. CASA is gathered through a massive transactional account base — not priced-up time deposits. Margin is "sustained" through CASA expansion, not loan yield:

> "The driver was CASA growth (+6% QoQ, 8.3% YoY) which expanded CASA ratio. BCA believes loan yield has bottomed but will be cautious in repricing opportunities. LDR fell 2.3% QoQ to 76%; this means there is still ample liquidity." [6]

The structural surplus liquidity (LDR at 76% vs. industry 84%) is itself part of the moat — it gives BBCA pricing power on the asset side because it never needs to chase deposits. [10]

### Component 2: Digital-First Channel Architecture

BBCA's operating model has been re-engineered around digital, with branches and ATMs now playing a secondary, relationship/onboarding role:

- **BCA mobile** (launched 2011) + **myBCA** (launched 2021) are the primary customer interfaces. [8]
- **~63% of new accounts opened online** in 1Q25. [8]
- Mobile banking transactions per user up from 18% (2022) to 26% (1Q25). [8]
- Mobile + internet share of transaction value rose to 14% (vs. 8% in 2023), reflecting deeper wallet share, not just channel migration. [8]

The myBCA platform has been broadened from a transaction tool into an all-in-one product control surface, including:
- NFC Tap to Pay; cross-border QR (Singapore / Malaysia / Thailand);
- A multi-currency wallet ("Forex Pocket") with 17 currencies including KRW;
- Worldwide access in >180 countries;
- Quick access to subsidiary products (blu, BSyA, BCA Mall, BCA equity-trading app);
- Real-time inbound/outbound fund notifications and cash-flow classification ("Financial Diary"). [9]

This is consistent with the corporate franchise framing — BBCA explicitly invests to "strengthen the transaction banking franchise through digitalization," i.e., digital is positioned as a defensive capex on the CASA moat, not as a separate digital-bank line. [12]

### Component 3: Prudent Underwriting & Capital Discipline

Operating discipline is the second leg of the equity story:
- **Sustainable ~21% ROE over decades**, the basis for the Gordon-growth valuation. [1][2]
- **CAR of 29.8%** in FY25 — among the highest in the Indonesian system, providing both resilience and dry powder for growth. [10]
- **Cost of credit guided at ~30 bps** with NPL at ~2% (bank-only ~1.2–1.3% ex-textile). [6]

### Component 4: Ecosystem & Cross-Sell

The bank monetizes the transactional account base through a multi-product ecosystem (debit/credit cards, e-deposit, auto-loan, insurance partners via BCA Insurance, mutual funds, retail government bonds, bancassurance) all surfaced inside the myBCA app — with "product recommendation and promos according to customer needs." [9]

This is the operating model's compounding mechanism: each new transactional customer becomes a multi-product customer with rising fee/AUM contribution.

---

## 4. What Sustains the Moat (and What Could Erode It)

CLSA flags one specific structural risk to the operating model:

> "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." [7]

In other words, the franchise *is* the transaction-banking first-mover advantage; the operating model's continued ability to "defend the transactional franchise" is the explicit fundamental catalyst CLSA monitors, alongside continued market-share gains in a stable macro. [2][7]

---

## Synthesis

BBCA's franchise is best summarized as a **transaction-banking-led, low-cost-deposit-funded universal bank** with:
1. A **CASA engine** (~84% of deposits, 16.9% system share) that produces structurally cheap funding,
2. A **diversified loan book** (47% corporate / 24% consumer / 15% commercial / 13% SME / 1% sharia) at ~2% NPL,
3. A **wealth/bancassurance overlay** that fee-monetizes the customer base, and
4. A **digital-first operating architecture** (BCA mobile + myBCA, 99% of transactions digital, 63% of accounts opened online) layered on top of a prudent, well-capitalized balance sheet that has delivered ~21% ROE through cycles.

The premium multiple (5.2x PB) is paid for the **operating-model output** — not the loan book — and that output is the durability of the CASA moat against state-bank digital encroachment.

---
**Sources**
[1] Bank Central Asia – O-PF (Good earnings despite tough macro) — CLSA, Sarina Lesmina (23 Apr 2025) — 607956688LinqAlpha.PDF
[2] Bank Central Asia – O-PF (Good earnings despite tough macro) — CLSA (23 Apr 2025), Valuation section — 607956688LinqAlpha.PDF
[3] Bank Central Asia – O-PF (Good earnings despite tough macro) — CLSA (23 Apr 2025), Wealth Management section — 607956688LinqAlpha.PDF
[4] Bank Central Asia – O-PF (Good earnings despite tough macro) — CLSA (23 Apr 2025), Loans and NPLs by Segment table — 607956688LinqAlpha.PDF
[5] Bank Central Asia – O-PF (Good earnings despite tough macro) — CLSA (23 Apr 2025), Consumer loan book table — 607956688LinqAlpha.PDF
[6] Bank Central Asia – O-PF (Good earnings despite tough macro) — CLSA (23 Apr 2025), Sustaining margin section — 607956688LinqAlpha.PDF
[7] Bank Central Asia – O-PF (A great close to the year) — CLSA (23 Jan 2025), Investment risks — 607948915LinqAlpha.PDF
[8] Bank Central Asia – O-PF (Good earnings despite tough macro) — CLSA (23 Apr 2025), Mobile Banking metrics — 607956688LinqAlpha.PDF
[9] Bank Central Asia – O-PF (Good earnings despite tough macro) — CLSA (23 Apr 2025), myBCA features table — 607956688LinqAlpha.PDF
[10] PT Bank Central Asia Tbk — Annual Report FY2025 (English), Transaction Banking Franchise section
[11] PT Bank Central Asia Tbk — Annual Report FY2025 (English), CASA & Third-Party Funds section
[12] PT Bank Central Asia Tbk — Annual Report 2020 (English), Strengthening the Transaction Banking Franchise through Digitalization

## Citations

- [1] **607956688LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956688LinqAlpha.PDF>
- [2] **607956688LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956688LinqAlpha.PDF>
- [3] **607956688LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956688LinqAlpha.PDF>
- [4] **607956688LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956688LinqAlpha.PDF>
- [5] **607956688LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956688LinqAlpha.PDF>
- [6] **607956688LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956688LinqAlpha.PDF>
- [7] **607948915LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/01/607948915LinqAlpha.PDF>
- [8] **607956688LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956688LinqAlpha.PDF>
- [9] **607956688LinqAlpha.PDF** · clsa — <s3://ext-linq-rms-clsa/2025/04/607956688LinqAlpha.PDF>
- [10] **PT Bank Central Asia Tbk (BBCA-ID) - Annual Report for period end 31-Dec-2025 (English) - PDF** · external
- [11] **PT Bank Central Asia Tbk (BBCA-ID) - Annual Report for period end 31-Dec-2025 (English) - PDF** · external
- [12] **BBCA_Annual Report_2020_ENG.pdf** · external

