March 17, 2025
Little by Little, Things Get Better

Market Commentary
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Ever heard the term "homecoming money"? That’s exactly what’s happening as Export Proceeds (DHE) start flowing back into the domestic banking system.

Since the regulations on DHE placement were tightened, domestic banks have been enjoying fresh inflows of funds that were previously parked overseas.

But that’s not all, around IDR 1,000 tn worth of SRBI will mature throughout 2025.

 


This means banks will receive a massive influx of funds on their balance sheets. With a combination of continued DHE inflows and maturing SRBI, banking sector liquidity will become even more abundant.

So, what happens when liquidity overflows? One key impact is that banks can become more aggressive in lending to the real sector.

However, they still need to be strategic.

For instance, BBCA is already preparing to raise lending rates in retail segments such as mortgage loans and automotive financing.

The goal? To adjust to rising funding costs and maintain healthy loan quality.

Interestingly, in 2M25, BBCA’s Bank Only NIM remained stable at 6.0%, the same as last year.

 


This indicates that banks are still able to preserve their margins despite the pressure from rising interest rates and potential credit risks.

Moving forward, if liquidity remains abundant and loan demand stays strong, the banking sector could see even stronger performance.

BBCA appears to be accelerating loan disbursement but slowing down DPK growth.

In 2M25, BBCA’s DPK only grew by 3.9% yoy, significantly slower than its loan growth, which surged by 14% yoy.

As a result, its LDR climbed to 81%, the highest level since April 2020, before the pandemic.

But this doesn’t seem to be a coincidence; it looks like a deliberate strategy.

BBCA has been actively reducing its reliance on time deposits, which declined by 4% yoy.

 


Why? Because time deposits are expensive, carrying high interest costs. Instead, BBCA is focusing on maintaining the growth of cheaper CASA, which increased by 6% yoy.

As a result, the CASA ratio remained solid at 82%, allowing BBCA to keep its cost of funds efficient.

 


The impact? BBCA successfully recorded a net profit of IDR 9.0 tn in 2M25, growing 8.4% yoy.

This is a solid achievement, even outperforming the banking industry’s average, which is expected to grow at a more moderate pace.

The main driver? Rapid loan growth of 14% yoy.

By maintaining an efficient funding structure through CASA dominance, BBCA has been able to sustain its margins despite rising LDR. Essentially, BBCA is playing it smart, being aggressive in lending while keeping efficiency in check.

Looking ahead, BBCA is expected to continue delivering solid profit growth, albeit at a more moderate pace.

In 2025, its net profit is projected to rise by 6% to IDR 58.3 tn, followed by another 6.7% increase to IDR 62.2 tn in 2026.


 



What enables BBCA to sustain this growth? A combination of smart strategies, an efficient funding structure, strong liquidity, and healthy loan growth.

By keeping CASA as the dominant source of funding, BBCA can control its cost of funds, ultimately ensuring NIM stability and preserving its margins.

 

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