Indonesia’s 2014 best performance bank is Bank BNI that recorded an amazing profit growth of 19.1% valued Rp 10.78 trillion compared to previous year’s profit at Rp 9.05 trillion. At the same period Bank BCA profit rose 15.7% from Rp 14.25 trillion to Rp 16.49 trillion. Bank Rakyat Indonesia (BRI) came as the second largets growth with a value of Rp 24.2 trillion, up 14.35% from Rp 21.16 trillion, followed by Bank Mandiri with a record profit of Rp 19.9 trillion, increased 9.34% from 2013’s profit of Rp 18.2 trillion.
Jahja Setiaatmadja, BCA President said on Thursday (5/3) that the growth was supported by the quality of the loan portfolio, a solid franchise funding, maintained operational efficiency is maintained and profit contribution of its subsidiaries.
BCA’s total loan portfolio grew 11% or Rp 34.3 trillion to Rp 346.6 trillion at the end of 2014. That figure consists of Rp 120.5 trillion in corporate loans which rose 16.9%, commercial and SME credit Rp 134.2 trillion increased 9.7%, and consumer loan grew 6.1% to Rp 92.3 trillion.
“The credit growth is not too large, with a low ratio of non-performing loans, maintained at the level of 0.6% with provisioning ratio of 324.2%,” explain Jahja.
Excess in Liquidity
Good financial performance resulted in adequate liquidity position with sustained growth in third party funds (DPK) that reached Rp 447.9 trillion, an inccrease of 9.4%. According to Jahja, in spite of the uncertain economic conditions, demand deposits and savings accounts (CASA) recorded a growth of 4.2% to Rp 336.4 trillion, which consists of savings Rp 229 trillion and current accounts Rp 103.2 trillion.
Deposit growth of 28.8% to Rp111.5 trillion is resulted from BCA decision to proactively raise deposit interest for certain categories. Jahja explained that the growth has been spotted since 2013due to the increase of deposit rate from April to August 2013 of approximately 3% in early 2013 to up to 8.25% for deposits over Rp 2 billion. Deposit growth continues despite that the bank has begun lowering deposit interest since August 2014 from 0.25% to 0.5%.
Following the surge in deposits, BCA’s cost of funds increased by 0.66%. The bank’s average cost of funds of the Bank has reached 2.61% in 2014 increased from 1.95% in 2013. “Thus, our net interest margin (NIM) did not rise too from 6.18% to 6.53%, or grew only 26 basis points,” said Eugene Keith Galbraith, BCA Vice President.
However, the bank maintained a critical in deposits to loans ratio (LDR) at the level of 76.8% an indication of excess in liquidity. Jahja reasoned, that the excess partly caused by some customers that have signed loan aggreement but loan disbursement were still in progress on the cut off of the reporting period.
Jahja said that the level of LDR will be maintained in the range of 74% -80% by tightening the loan provision. BCA recorded a strong capital levels with CAR ratio of 16.9% by the end of 2014.