BBCA The Bucket That "Nearly Quadrupled" Just Emptied Into the Worst One

The Migration FY2017 Flagged Just Kept Moving

The FY2017 post closed on a specific number: bank-only Substandard loans had grown 271% in a single year, from Rp535 billion to Rp1,987 billion, while the "Loss" bucket - the worst collectability tier - had actually fallen slightly. The framing at the time was that credit quality was migrating down the ladder into worse-but-not-worst categories, not collapsing outright. One quarter later, that framing needs an update: Substandard loans fell 65.0% quarter-over-quarter to Rp695 billion, and the Loss bucket - the one that had stayed flat all of 2017 - jumped 31.9% to Rp5,637 billion. Total NPL hit a fresh nominal high of Rp7,223 billion, up 4.0% QoQ and 19.9% YoY, and provision-to-NPL coverage fell to 183.6%, a new low in a multi-year decline this series has tracked every quarter since Dec 2015's 322.2%.

Read those two numbers together and the story isn't credit quality quietly deteriorating - it's the same loans that were flagged as newly Substandard a quarter ago now sliding two tiers further down, into the bucket BCA itself has said it doesn't write off for corporate exposure. The gross NPL ratio still looks unremarkable at a rounded 1.5%, exactly where it's sat for five straight quarters, which is precisely why the bucket-level detail matters more than the headline ratio here.

Not everything continued the direction FY2017 set. CASA actually improved, both sequentially and year-over-year - up to 77.29% from 76.35% at Dec-17 and 75.77% a year earlier - a genuine reversal of the four-quarter decline this series tracked through most of 2017, not just the "leveling off" the FY2017 post described. And operating cash flow, which had swung from negative at 9M 2017 back to a positive Rp9.66 trillion for the full year, flipped negative again this quarter - a reminder that the full-year figure masked real quarter-to-quarter volatility rather than resolving it.

The Prescription

BCA's own numbers this quarter make the case for itself: keep leaning into the transaction-banking franchise that's now pulling CASA back up (77.29%, the best reading since before this series' multi-quarter decline began) rather than chasing loan growth through higher-cost time deposits, and keep growing Corporate lending (+17.6% YoY, the fastest of the three segments again) while it's still producing margin-accretive volume. What it should stop doing is presenting the gross NPL ratio as the asset-quality headline without the collectability-bucket detail sitting right next to it in the same filing. A ratio that's held at "1.5%" for five consecutive quarters while the worst bucket underneath it grows 32% in three months isn't a stable metric - it's a stable label on an unstable book, and BCA's own management commentary in the FY2017 report already showed it's capable of naming that distinction when it chooses to. It should do so every quarter, not just the ones with an annual report.

Key Financial Metrics

Q1 2018 vs. Q1 2017 (P&L, cash flow, consolidated unaudited figures) and 31 Mar 2018 vs. 31 Dec 2017 (balance sheet, consolidated)

FX: IDR 13,767.5 = USD 1 (March 31, 2018, per BCA's own filed financial statements' Reuters middle-rate disclosure).

Like every prior interim post in this series except FY2017's full annual filing, this quarter reverts to the shorter OJK-format interim disclosure - the balance sheet, income statement, commitments/contingencies, asset-quality, and capital-adequacy schedules required for quarterly publication, but no notes to the financial statements (no related-party transactions note, no legal-proceedings disclosure, no lease or purchase-commitment schedule). See Beyond the Usual for what's still visible without them.

Metric	Q1 2018 (IDR)	Q1 2018 (USD)	Q1 2017 (IDR)	YoY
Net Interest Income	Rp10,780,680M	~$783.1M	Rp10,071,751M	✅ +7.0%
Non-interest operating income (gross)	Rp5,318,908M	~$386.4M	Rp5,226,620M	⚠️ +1.8%
Pre-tax income	Rp6,890,621M	~$500.5M	Rp6,267,524M	✅ +9.9%
Net Income (attributable to owners)	Rp5,508,035M	~$400.1M	Rp4,989,298M	✅ +10.4%
EPS (quarterly, consolidated)	Rp223	~$0.016	Rp202	✅ +10.4%

Balance sheet metric	Mar 2018 (IDR)	Mar 2018 (USD)	Dec 2017 (IDR)	QTD
Total Assets	Rp759,850,844M	~$55.19B	Rp750,319,671M	✅ +1.3%
Loans	Rp470,157,475M	~$34.15B	Rp467,508,825M	✅ +0.6%
Total Deposits (Third Party Funds)	Rp583,519,143M	~$42.38B	Rp581,115,442M	✅ +0.4%
Total Liabilities	Rp623,397,983M	~$45.28B	Rp618,917,977M	✅ +0.7%
Total Equity (attributable to owners)	Rp136,354,502M	~$9.90B	Rp131,303,555M	✅ +3.9%

Loans grew 15.0% YoY (Rp470,157,475M vs. Rp408,693,000M at Mar-17) - the fastest YoY loan growth this series has recorded since well before FY2017's 12.4%. Total deposits grew 9.0% YoY (Rp583,519,143M vs. Rp535,145,000M).

Operating cash flow was negative Rp881,116M this quarter, a reversal from positive Rp1,705,865M in Q1 2017, driven by a Rp2,782,487M net increase in loans disbursed and a Rp7,208,278M build in trading securities that deposit inflows (Rp2,403,701M net) didn't fully offset (fixed-asset purchases were Rp278,193M this quarter). Cash and cash equivalents fell to Rp79,767,237M (~$5.79B) at quarter-end, down from Rp83,377,439M at Dec 2017 and down 2.7% YoY from Rp81,968,961M at Mar 2017. This is the second time in three quarters this series has recorded a negative quarterly operating cash flow reading for BCA (the other being 9M 2017's cumulative figure) - a reminder that FY2017's full-year positive Rp9.66 trillion reading, as that post noted, was carrying real quarter-to-quarter swings underneath it rather than a smooth trend.

Net income grew double digits again this quarter and CASA genuinely improved - but the balance sheet's worst-quality loan bucket grew faster than either of those numbers, and operating cash flow went negative for the second time in three quarters.

Key Operational Metrics

All ratios below are bank-only (individual), matching the basis used in every prior post in this series, from BCA's own filed financial-ratio disclosure:

• CASA ratio^»: 77.29% (Mar 2018) vs. 76.35% (Dec 2017) vs. 75.77% (Mar 2017) ✅ - a genuine reversal of the multi-quarter decline this series tracked through most of 2017, not just the near-flat reading FY2017 reported. Both the QoQ and YoY moves are now positive.
• Loan to Funding Ratio^» (LFR): 77.85% (Mar 2018) vs. 78.2% (Dec 2017) vs. 75.05% (Mar 2017) ⚠️ - down slightly QoQ but still up 280bp YoY, as loan growth (15.0%) continued to outpace deposit growth (9.0%).
• NIM^»: 6.06% (Mar 2018) vs. 6.2% (Dec 2017) vs. 6.32% (Mar 2017) ⚠️ - compression continues, now the fifth straight quarter this series has recorded a YoY NIM decline, as lower earning-asset yields outpaced the falling cost of funds.
• ROA^»: 3.40% (Mar 2018) vs. 3.9% (Dec 2017) vs. 3.48% (Mar 2017) ⚠️ - down both QoQ and YoY.
• ROE^»: 16.06% (Mar 2018) vs. 19.2% (Dec 2017) vs. 17.07% (Mar 2017) ⚠️ - the QoQ drop is seasonal (Q1's equity base grows off retained FY2017 earnings before a full year's profit accrues against it), but the YoY decline continues the multi-year trend this series has tracked since 2011.
• CAR^» (credit, market and operational risk): 23.65% (Mar 2018) vs. 23.1% (Dec 2017) vs. 23.10% (Mar 2017) ✅ - capital keeps building regardless of the credit-quality trend below.
• NPL ratio - gross: 1.54% (Mar 2018) vs. 1.5% (Dec 2017) vs. 1.47% (Mar 2017) ⚠️ - a new nominal NPL high (Rp7,223bn bank-only), up 19.9% YoY. NPL ratio - net: 0.46% (Mar 2018) vs. 0.4% (Dec 2017) vs. 0.38% (Mar 2017).
• Provision/NPL coverage: 183.6% (Mar 2018) vs. 190.7% (Dec 2017) vs. 203.3% (Mar 2017) ⚠️ - a new low in the sequential erosion this series has tracked since Dec 2015's 322.2% coverage.
• Cost Efficiency Ratio (bank-only opex over interest-plus-fee income): 53.2% (Mar 2018) vs. 44.4% (Dec 2017) vs. 52.8% (Mar 2017) ⚠️ - the QoQ jump is seasonal, not a genuine efficiency deterioration; see Beyond the Usual.
• BOPO^» (cost-to-income, the regulator's broader definition including provisioning): 63.29% (Mar 2018) vs. 58.6% (Dec 2017) vs. 65.20% (Mar 2017) - worse QoQ (same seasonal driver as above) but improved YoY.
• Special Mention loans (bank-only): Rp8,787 billion (Mar 2018), up 30.7% quarter-over-quarter from Rp6,722 billion at Dec 2017 and up 6.7% year-over-year from Rp8,235 billion (Mar 2017) - reversing the Q4 pullback FY2017 reported and resuming the growth this series tracked through most of 2017.
• Indonesia's national banking-sector NPL ratio rose to 2.9% in February 2018 from 2.6% at Dec 2017, per Bank Indonesia/OJK data cited in BCA's own investor presentation, while sector loan growth ran 8.2% YoY against BCA's 15.0% - BCA's book is growing roughly twice as fast as the system while staying well inside the sector's NPL average.

Segment Performance

BCA reports three lending segments (bank-only): Corporate, Commercial & SME, and Consumer. All figures below are bank-only, per BCA's own quarterly filing and investor presentation. Note that BCA reclassified certain mortgage loans into Commercial & SME during Q4 2017 and restated the Mar-17 comparative accordingly - the YoY growth rates below use that restated base, not the figures FY2017's post originally reported for Dec-16 (which predates the reclassification).

Corporate

Corporate loans reached Rp179,406 billion (Mar 2018), up 17.6% YoY and 1.2% QoQ - the fastest-growing segment for a second straight period, extending the lead FY2017 first flagged. Distributor/Wholesaler/Retailer exposure held flat at 9.0% of total business loans (unchanged from Dec-17), no longer the accelerating mover it was through 2017, while Financial Services jumped to 6.3% of the book from 5.5% at Dec-17 - the largest single-quarter mover in BCA's top-ten sector disclosure this quarter.

Commercial & SME

Commercial & SME loans reached Rp166,707 billion (Mar 2018), up 14.4% YoY (restated basis) but down 0.5% QoQ - a slight quarterly pullback after the reclassification-driven jump reported at year-end. The segment's YoY growth rate is now the strongest of the three-segment comparison this series has recorded in over a year, though part of that strength is mechanical: the FY2017 post already noted Rp5.4 trillion of 2017's Commercial & SME growth came from loans reclassified out of Consumer rather than organic new lending.

Consumer

Consumer loans reached Rp123,939 billion (Mar 2018), up 12.0% YoY and a modest 0.9% QoQ - now clearly the slowest-growing of the three segments, continuing the deceleration FY2017 flagged as a change from the earlier part of 2017. Mortgages fell slightly QoQ (Rp71,953 billion vs. Rp73,026 billion at Dec-17) despite still growing 10.6% YoY, while vehicle loans grew the fastest within Consumer (Rp40,178 billion, +14.6% YoY) on the back of a new "Fix and Cap" mortgage product launched in February 2018 with a historically low 2-year fixed rate of 5.61% - a promotional push that hadn't yet shown up in the mortgage balance by quarter-end.

Segment Comparison

Segment	Mar 2018 (Rp bn)	Dec 2017 (Rp bn)	Mar 2017 (Rp bn, restated)	YoY	Share (Mar 2018)
Corporate	179,406	177,277	152,566	✅ +17.6%	38.2%
Commercial & SME	166,707	167,487	145,705	✅ +14.4%	35.4%
Consumer	123,939	122,856	110,639	✅ +12.0%	26.4%
Total	470,052	467,620	408,910	✅ +15.0%	100%

Corporate's lead over Consumer, which FY2017 first showed reversing the historical pattern in this series, held for a second straight quarter and widened - the gap between Corporate's 17.6% YoY growth and Consumer's 12.0% is now the widest this series has recorded between the two segments.

Beyond the Usual

This quarter's filing reverts to the shorter OJK-format interim disclosure - balance sheet, P&L, commitments/contingencies, and asset-quality/capital-adequacy schedules, but no notes to the financial statements. The findings below come from the collectability and quarterly-trend detail those schedules still disclose.

Substandard Loans Collapsed 65% the Same Quarter Loss Loans Jumped 32%

Bank-only collectability data shows Substandard loans fell from Rp1,987 billion (Dec 2017) to Rp695 billion (Mar 2018), a 65.0% quarterly drop - but Loss loans, which had stayed essentially flat through all of 2017 (Rp4,394bn → Rp4,272bn), jumped 31.9% to Rp5,637 billion in the same quarter. Doubtful loans also grew, up 29.9% to Rp891 billion. Total NPL rose to a new nominal high of Rp7,223 billion (+4.0% QoQ, +19.9% YoY), and provision-to-NPL coverage fell to 183.6%, a new low in the multi-year erosion this series has tracked since Dec 2015's 322.2%. Read against FY2017's finding that Substandard loans had nearly quadrupled over 2017, this quarter's data reads less like resolution and more like migration completing itself: the same pool of loans that moved into Substandard through 2017 appears to have kept sliding into Doubtful and Loss rather than recovering back into Current or Special Mention. The headline gross NPL ratio (1.54%) barely moved - it's the bucket composition underneath it that changed materially.

The Q1 Efficiency-Ratio Jump Is a Recurring Seasonal Pattern, Not New Deterioration

BCA's own quarterly income-statement breakdown shows personnel expenses have been the highest of any quarter in every Q1 this series has data for - Rp4,376 billion in Q1 2018, more than double Q4 2017's Rp2,063 billion, and 8.5% above Q1 2017's Rp4,034 billion. That's what drives the Cost Efficiency Ratio's jump to 53.2% this quarter from 44.4% at Dec 2017 - a QoQ pattern that repeats every year in this series' data rather than a new efficiency problem, consistent with BCA's own explanation that first-quarter personnel costs run seasonally higher (year-end tantiem/bonus payouts). A reader comparing Q1 2018's efficiency ratio against Q4 2017's without this context would see an 880bp deterioration that isn't really there; the YoY comparison (53.2% vs. 52.8% a year earlier) is the one that actually reflects underlying trend, and it's essentially flat.

CASA's Reversal Held Up Under a Closer Look at the Underlying Mix

The CASA improvement flagged above isn't concentrated in one account type: savings deposits grew 1.7% QoQ and current accounts grew 1.7% QoQ, while time deposits - the more expensive funding source - fell 3.6% QoQ (Rp137,479bn → Rp132,514bn). That's a genuinely favorable funding-mix shift, not just a denominator effect from loan growth diluting the ratio, and it lines up with BCA's own disclosure of a historically low blended cost of funds (1.75% at Mar 2018, the lowest reading in the five quarters this series has tracked).

Target Valuation Range

P/E of ~24.1x and P/B of ~4.21x, implying a market cap of ~Rp574,462B (~$41.73B) - richer again on both multiples, now for the fourth straight quarter this series has tracked. The market continues to price in CASA's stabilization and continued double-digit loan growth, even as the coverage ratio backing that loan book keeps hitting new lows.

BCA's shares closed at approximately Rp23,300 on March 30, 2018 (converted from BCA's post-split share count, adjusted for the company's later 1:5 stock split in October 2021, since price data pulled today for this period reflects that split retroactively) - up 6.4% from Rp21,900 at Dec 29, 2017, and up roughly 75% from the two-year-ago mark around Rp13,300 (March 2016, the earliest point in this post's pricing window). The move wasn't concentrated in Q1 alone - the stock had already run to roughly Rp22,725 by end-January and Rp23,175 by end-February, meaning most of the quarter's gain came in January rather than steadily across the three months.

Market cap → book value	Q1 2018
Share price (period-end)	Rp23,300
Shares outstanding	24,655,010,000
Market capitalization	Rp574,462B (~$41.73B)
Book value (equity attributable to parent)	Rp136,355B (~$9.90B)
P/B»	~4.21x

P/E and P/B	FY2017	Q1 2018	Change
EPS (trailing)	Rp945	Rp966	✅ up
P/E»	~23.2x	~24.1x	⚠️ up
Book value per share	Rp5,325	Rp5,531	✅ +3.9%
P/B»	~4.11x	~4.21x	⚠️ up

As in every prior post in this series, a full DCF isn't attempted here - a bank whose provision-to-NPL coverage just hit a new multi-year low in the same quarter its worst-quality loan bucket grew fastest isn't a good subject for a model built on multi-year earnings-quality stability. The peer-multiple comparison this section would normally lean on isn't available either: no other IDX bank in this backlog has a post covering the same March 2018 quarter-end yet to compare against.

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