Bank Central Asia – Good, But New Credit Challenges Ahead

Bank Central Asia – Substantial Credit Delta Improvement

Bank Central Asia (BBCA IJ) - More Than Respectable

Bank Central Asia – Poor Showing At Indo Bellweather

Gravity Works As WeWork Doesn't; Now Plan B

Silver Point

Thomas J. Monaco

Independent Insight Provider

Silver Point is a boutique research firm that focuses on the broader financial services sector, with a particular focus on troubled institutions globally. 

Asia Ex Japan

Equity Bottom-Up

*Improved Operating Result: Bank Central Asia (BBCA.IJ) [BCA] reported 1Q21 results of IDR 7.0 tn do not do BCA justice, as core operating results grew IDR 1.5 tn (40.9%) over the same period. BCA’s positive operating results were highlighted by two factors: a) interest income growth of IDR 385 mn (2.8%) due largely to a bit of leverage in the corporate securities portfolio, and b) a tax rate reduction; and*Credit Challenges Persist, But Credit Break Decelerates: By our calculation, we find that 1Q20 net new NPLs amounted to IDR 742 bn for annualized rate of increase of 28.7% - which is quite favorable compared to 4Q20 results of IDR 1.3 tn and 46.5%. Given the surprise deceleration in net new NPL formation, we calculate that loss reserves are likely right where they need to be given the uptick in special mention and lack of full clarity with the restructuring portfolio.

*Improved Operating Result: Bank Central Asia (BBCA.IJ) [BCA] reported 1Q21 results of IDR 7.0 tn do not do BCA justice, as core operating results grew IDR 1.5 tn (40.9%) over the same period. BCA’s positive operating results were highlighted by two factors: a) interest income growth of IDR 385 mn (2.8%) due largely to a bit of leverage in the corporate securities portfolio, and b) a tax rate reduction; and*Credit Challenges Persist, But Credit Break Decelerates: By our calculation, we find that 1Q20 net new NPLs amounted to IDR 742 bn for annualized rate of increase of 28.7% - which is quite favorable compared to 4Q20 results of IDR 1.3 tn and 46.5%. Given the surprise deceleration in net new NPL formation, we calculate that loss reserves are likely right where they need to be given the uptick in special mention and lack of full clarity with the restructuring portfolio.

Maybank Kim Eng Securities Thailand (MBKET TB)

Bank Central Asia – Light At The End Of The Tunnel