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

*Solid Result, But Challenges Ahead: Bank Central Asia (BBCA.IJ) [BCA] reported 3Q21 results of IDR 8.7 tn, improving IDR 1.3 tn (17.9%) on a linked quarter basis. BCA’s positive operating performance was highlighted by a loss provision cut of 66.5%, a slightly reduced tax rate, and a modest decline in costs; and*Credit Challenges Abating: By our calculation, we find that 3Q21 net new NPLs amounted to IDR 942 bn for an annualized rate of increase of 27.2%, and comparing very favorably to the 92.4% rate in 2Q21. Despite the significant deceleration in net new NPL formation, we calculate that loss reserves are likely right where they need to be.

*Solid Result, But Challenges Ahead: Bank Central Asia (BBCA.IJ) [BCA] reported 3Q21 results of IDR 8.7 tn, improving IDR 1.3 tn (17.9%) on a linked quarter basis. BCA’s positive operating performance was highlighted by a loss provision cut of 66.5%, a slightly reduced tax rate, and a modest decline in costs; and*Credit Challenges Abating: By our calculation, we find that 3Q21 net new NPLs amounted to IDR 942 bn for an annualized rate of increase of 27.2%, and comparing very favorably to the 92.4% rate in 2Q21. Despite the significant deceleration in net new NPL formation, we calculate that loss reserves are likely right where they need to be.

Bank Central Asia – Substantial Credit Delta Improvement

*Solid Result, But Challenges Ahead: Bank Central Asia (BBCA.IJ) [BCA] reported 2Q21 results of IDR 7.4 tn, improving IDR 376 mn (5.3%) on a linked quarter basis. BCA’s positive operating results were highlighted by non-interest income growth and a decline in operating expenses; and*Credit Challenges Persist, As Credit Break Re-Accelerates: By our calculation, we find that 2Q21 net new NPLs amounted to IDR 2.4 tn for an annualized rate of increase of 92.4%, comparing very unfavorably with 1Q21’s IDR 742 bn and 28.7%, respectively. Despite the recent acceleration 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. Although, we worry the softness in current macro conditions.

*Solid Result, But Challenges Ahead: Bank Central Asia (BBCA.IJ) [BCA] reported 2Q21 results of IDR 7.4 tn, improving IDR 376 mn (5.3%) on a linked quarter basis. BCA’s positive operating results were highlighted by non-interest income growth and a decline in operating expenses; and*Credit Challenges Persist, As Credit Break Re-Accelerates: By our calculation, we find that 2Q21 net new NPLs amounted to IDR 2.4 tn for an annualized rate of increase of 92.4%, comparing very unfavorably with 1Q21’s IDR 742 bn and 28.7%, respectively. Despite the recent acceleration 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. Although, we worry the softness in current macro conditions.

Bank Central Asia – Good, But New Credit Challenges Ahead

Indonesia

PT Allo Bank Indonesia Tbk provides commercial banking services. The Bank serves customers in Indonesia.

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Allo Bank Indonesia Tbk PT (BBHI IJ)

Bank Central Asia – Substantial Credit Delta Improvement

BANK CENTRAL ASIA : BCA reported a 3Q21 QOQ results increase of 17.9%, driven by justifiable credit leverage. 3Q21 net new NPLs decelerated from...

Thomas J. Monaco

Bank Central Asia – Good, But New Credit Challenges Ahead

BANK CENTRAL ASIA: BCA reported a 5.3% QOQ 2Q21 results increase. Despite the 92.4% net new NPLs increase, we calculate that loss reserves are...

Thomas J. Monaco

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