Wednesday, July 29, 2009

BCA profit surged 36% to US$330 million, people?

Bank Central Asia (BBCA) reported net profit of Rp3.3 trillion or about US$330 million in the first half 2009, surged 36% from the same period last year. What crisis?
Indonesia's major banks keep telling "good news" to their "shareholders", but probably not for the depositors and debtors. 
BCA said its strong first half results were driven by increases in net interest income and fee-based income, and by a tax rate of 23% in the first half 2009 compared to 30% in the first half 2008. 
The bank received a benefit of a 5% reduction of income tax rate following the implementation of Government Regulation No. 81/2007 for qualified listed companies so that BCA's full year 2008 income tax rate was adjusted to 25%. How generous the government is.
Indonesians are also generous to BCA. Third party funds grew by 15.2% to Rp219.4 trillion at the end of June 2009, where total deposits increased 13.7%. Outstanding loans? Well, it increased 12.3% only to Rp107.3 trillion.
They got people's money for 2%, and then loaned them to people at above 14%. Such a huge spread is considered "inefficient" for the economy, but generous for the shareholders. That's why BCA, like BRI, booked over Rp19 trillion net profit in the 2004-2009 period only. Where in the world you can get that?
BCA is controlled by Budi Hartono family (Djarum Group). Market capitalization? US$9 billion. Unbelievable! Djarum and Farallon acquired 51% shares of BCA for few hundred million USD, and in seven years, they got US$4.5 billion plus dividends. Probably the dividends only had repaid the capital investment to acquire the bank.

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