by BNI Securities
The bank posted an impressive earning result in 2010 with 23% improvement on net earnings compared to a year earlier. The bank was able to disburse 15% higher from its 2009's outstanding loan of IDR 124 trillion to IDR 154 trillion. Despite that BBCA lowered it net interest margin, from 6.4% in 2009 to 5.3% in 2010, the bank managed to lift up its interest income about IDR 2 trillion. BBCA would be a liquidity rich bank in 2011 as its 2010 LDR ratio posted at 55%.
Additional liquidity streams from mature government bond in this year. Combined fixed and variable rates government bond amounts to IDR 9.3 trillion and BBCA may receive IDR 10 trillion next year. We figure that the bank may apply low deposit rate.
The bank has stated that will reduce saving account interest rate about 25 bps. The action would be taken to anticipate lower interest income streams from Treasury Notes (Surat Perbendaharaan Negara/SPN) that replacing Bank Indonesia
Certificate (Sertifikat Bank Indonesia/SBI).
BBCA prefers to place additional fund to Bank Indonesia current account rather than accomplishing 78% minimum level of LDR.
We are pleased to see BBCA's ability in managing its effectiveness, the main factor in gaining good result in the coming year for banking sector. We believe that in the case of raising inflationary pressure this year, BBCA has shielded itself well and would possess resiliency toward it. We have positive outlook for BBCA's performance and recommend BUY for BBCA after calculating its fair price of IDR 7800 per share.