BBCA The Write-Off Surge That Vanished a Quarter Later

A Write-Off Spike That Looked Structural Lasted Exactly One Quarter

The Q1 2019 post flagged bank-only write-offs of Rp740,616 million for that quarter alone - a 28.2x jump from Q1 2018's Rp26,280 million, already equal to roughly 30% of the entire Rp2,497,650 million written off across all of 2018. The post's own framing at the time was careful not to over-read it: "a single quarter's write-off pace isn't a reliable full-year run-rate on its own... but the year-over-year jump is large enough... to be worth checking against Q2 2019's own pace rather than dismissing as noise." That check is now possible. Bank-only write-offs for the full first half of 2019 total Rp851,276 million, which means Q2 2019 alone wrote off just Rp110,660 million - a 6.7x deceleration from Q1's pace, and only about 4x Q1 2018's abnormally quiet base. Whatever drove Q1's surge, it wasn't the start of a sustained cleanup cycle; it was concentrated almost entirely in a single quarter. Recoveries followed the same pattern in reverse: Rp62,046 million in Q1 alone against Rp81,253 million in Q2 (H1 total Rp143,299 million, down from Rp168,248 million in H1 2018) - Q2's recovery pace actually improved on Q1's, even as the amount being recovered from collapsed.

The Prescription

BCA should keep leaning on the funding side of the business it's already won - CASA still funds roughly three-quarters of total deposits and the bank's digital-transaction migration (branch banking transaction value actually fell 2.9% year-over-year in H1 2019 even as mobile banking grew 51.5%) keeps that base cheap without the bank having to compete on rate. The Bank Royal acquisition, approved by shareholders on 20 June 2019 and still pending regulatory sign-off, is the right kind of expansion for that base - small, digestible, extending reach rather than buying growth the bank doesn't need.

What it should stop doing: treating a single quarter's asset-quality print as if it tells a clean story on its own. This series now has two consecutive quarters - Q1's write-off spike and, as this post covers, Q2's near-disappearance of it - that would each have supported a confident narrative ("credit cleanup accelerating" or "credit cleanup basically done") if read in isolation. Neither was right; the two-quarter combination is what's actually informative, and BCA's own quarterly materials don't flag the swing at all. A reader relying only on the headline NPL ratio - flat at 1.4% both quarters - would never know write-off activity moved this violently underneath it.

Key Financial Metrics

H1 2019 vs. H1 2018 (consolidated, unaudited interim OJK-format filing)

FX: IDR 14,127.5 = USD 1 (June 30, 2019, per BCA's own filed financial statements' Reuters middle-rate disclosure); IDR 14,330.0 = USD 1 for the Jun 2018 comparative, per the H1 2018 post's own sourcing from the same disclosure basis.

Like every interim quarter in this series, this is an unaudited OJK-format filing - a balance sheet, income statement, commitments and contingencies schedule, cash-flow statement, asset-quality schedule, and capital-adequacy calculation, but no narrative notes to the financial statements the way a full annual report carries. See Beyond the Usual for what the asset-quality and write-off schedules turned up this half.

Metric	H1 2019 (IDR)	H1 2019 (USD)	H1 2018 (IDR)	YoY
Net Interest Income	Rp24,631,355M	~$1,743.6M	Rp21,782,672M	✅ +13.1%
Non-interest operating income (gross)	Rp12,944,374M	~$916.3M	Rp11,416,077M	✅ +13.4%
Pre-tax income	Rp16,145,517M	~$1,142.8M	Rp14,327,767M	✅ +12.7%
Net Income (attributable to owners)	Rp12,861,707M	~$910.4M	Rp11,420,955M	✅ +12.6%
EPS (year to date, consolidated basis)	Rp522	~$0.037	Rp463	✅ +12.7%

Balance sheet metric	Jun 2019 (IDR)	Jun 2019 (USD)	Dec 2018 (IDR)	YTD
Total Assets (consolidated)	Rp870,457,083M	~$61.62B	Rp824,787,944M	✅ +5.5%
Loans (net, consolidated)	Rp551,922,126M	~$39.06B	Rp538,099,448M	✅ +2.6%
Total Deposits (Third Party Funds, bank-only)	Rp673,872,000M*	~$47.70B	Rp634,928,000M*	✅ +6.1%
Total Liabilities (consolidated)	Rp710,772,746M	~$50.31B	Rp673,034,517M	✅ +5.6%
Total Equity (attributable to owners, consolidated)	Rp159,589,089M	~$11.30B	Rp151,659,684M	✅ +5.2%

*Third Party Funds figure per BCA's own investor presentation (bank-only basis); the filed OJK balance sheet doesn't total this line separately across current accounts, savings, and time deposits for the consolidated entity.

Consolidated operating cash flow came in at Rp14,149,067M (~$1,001.4M), up from Rp10,311,119M (~$719.6M) a year earlier - a genuine improvement, not the seasonal lending-pause artifact that flattered Q1 2019's own reading: loans actually grew 2.6% YTD this half rather than contracting, and deposit inflows (Rp39,538,493M) still outpaced the cash used for new lending (Rp15,683,778M) by a wide enough margin to keep operating cash flow solidly positive. ✅ Cash and cash equivalents stood at Rp100,764,240M (~$7.13B) at period-end, down from Rp103,311,560M at Dec 2018 as investing activities (net securities purchases of Rp52,515,959M against Rp43,035,346M of maturities) again drew the balance down, similar to the pattern Q1 2019's post described for that quarter alone.

Net income grew a clean 12.6% for the half, and this time the positive operating cash flow reading reflects genuine deposit growth outpacing genuine loan growth - not, as in Q1 alone, a quarter where lending simply paused.

Key Operational Metrics

All ratios below are bank-only (individual). Where BCA's own filed financial-ratio disclosure for this quarter covers a metric, that figure is used for Jun 2019 and the Jun 2018 comparative; Dec 2018 and CASA are sourced from BCA's own investor presentation (bank-only basis), consistent with Q1 2019's approach:

• CASA ratio^»: 75.7% (Jun 2019, computed as CASA of Rp510,410bn over Third Party Funds of Rp673,872bn) vs. 76.2% (Dec 2018) vs. 77.7% (Jun 2018) ⚠️ - down both YTD and YoY, as time deposits (+18.1% YoY) grew faster than the cheaper current-account-and-savings base (+5.9% YoY) for the first time in several quarters this series has tracked.
• LDR^»: 78.97% (Jun 2019, filed ratio) vs. 81.6% (Dec 2018) ✅ - improved, unlike Q1 2019's QoQ improvement which came from loans contracting; this time deposits (+6.1% YTD) simply grew faster than loans (+2.6% YTD).
• NIM^»: 6.24% (Jun 2019, filed ratio) vs. 6.13% (Dec 2018) ✅ - a seventh straight quarter of sequential NIM improvement on this series' own tracking, extending Q1 2019's sixth straight reading.
• ROA^»: 3.70% (Jun 2019, filed ratio) vs. 3.59% (Jun 2018) ✅ - up 11bp YoY.
• ROE^»: 16.85% (Jun 2019, filed ratio) vs. 17.26% (Jun 2018) ⚠️ - continuing the multi-year erosion this series has tracked since 2011.
• CAR^» (bank-only, credit, market and operational risk): 23.58% (Jun 2019, filed ratio) vs. 22.81% (Jun 2018) ✅ - up further from an already comfortable base; consolidated CAR reached 24.18%.
• NPL ratio - gross: 1.41% (Jun 2019, filed ratio) vs. 1.43% (Jun 2018) ✅ - improved YoY, and flat against BCA's own presentation-basis figure for Dec 2018 (1.4%), unlike Q1 2019's worsening ratio. NPL ratio - net: 0.52% (Jun 2019) vs. 0.43% (Jun 2018) ⚠️, up.
• BOPO^»: 62.59% (Jun 2019, filed ratio) vs. 62.12% (Jun 2018) ⚠️ - worsened 47bp YoY, though still well below Q1 2019's own YoY comparison of 191bp worse.
• NSFR^»: 158.33% (individual) at Jun 2019, down from 166.12% a year earlier but still comfortably above the 100% regulatory minimum.

Segment Performance

BCA reports three lending segments (consolidated, per this quarter's investor presentation): Corporate, Commercial & SME, and Consumer. As in Q1 2019, the presentation is the only segment source available this quarter - no annual report to cross-check against.

Corporate

Corporate loans recovered to Rp219,160 billion (Jun 2019), up 2.8% YTD from Rp213,274 billion at Dec 2018 and reversing Q1 2019's first-ever sequential decline for the segment. Up 14.6% year-over-year from Rp191,268 billion, confirming the Q1 pullback really was the seasonal pause this series' earlier posts read it as, not the start of a slowdown.

Commercial & SME

Commercial & SME loans grew to Rp189,183 billion (Jun 2019), up 2.8% YTD and 12.5% year-over-year from Rp168,199 billion - keeping pace almost exactly with Corporate's own YTD growth rate this half, after Q1 2019 briefly made Commercial & SME the sole growth engine while Corporate contracted.

Consumer

Consumer loans grew to Rp151,971 billion (Jun 2019), up 2.0% YTD and 6.4% year-over-year from Rp142,776 billion - the slowest-growing of the three segments both YTD and YoY, continuing the pattern this series has tracked since Consumer first fell behind Corporate as a growth engine. Mortgages - the segment's largest component - grew to Rp90,705 billion, up 3.2% YTD and 11.2% YoY, still outpacing Consumer lending as a whole and continuing to carry the segment, as Q1 2019's post described.

Segment Comparison

Segment	Jun 2019 (Rp bn)	Dec 2018 (Rp bn)	YTD	Jun 2018 (Rp bn)	YoY	Share (Jun 2019)
Corporate	219,160	213,274	✅ +2.8%	191,268	✅ +14.6%	38.8%
Commercial & SME	189,183	184,034	✅ +2.8%	168,199	✅ +12.5%	33.5%
Consumer	151,971	148,947	✅ +2.0%	142,776	⚠️ +6.4%	26.9%
Total	565,232	551,155	✅ +2.6%	506,957	✅ +11.5%	100% (ex-Sharia)

Corporate and Commercial & SME grew at almost identical YTD rates (2.8% each) this half, both meaningfully ahead of Consumer's 2.0% - a return to the pre-Q1-2019 pattern of Corporate and Commercial & SME jointly leading loan-book growth, rather than Q1 2019's single-quarter reshuffling where Commercial & SME briefly carried the book alone.

Stock Price: The Uptrend Held Through the Half

BCA's shares closed at approximately Rp29,975 on June 28, 2019 (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 15.3% from Rp26,000 at Dec 31, 2018, and up 8.8% from Q1 2019's own Rp27,550 close. Unlike the two prior quarters this series has covered, there was no meaningful intra-quarter pullback - the climb from Q1's close to Q2's was comparatively steady. Over the trailing two years, shares are up roughly 60% from around Rp18,700 (Jul 2017, the earliest point in this post's pricing window).

Beyond the Usual

This quarter's filing is an unaudited interim OJK-format statement - no narrative notes to the financial statements, but it does carry a full asset-quality schedule (collectability buckets by related-party and non-related-party counterparty) and a write-off/recovery disclosure, which is where most of the findings below come from.

The Write-Off Surge Q1 Flagged Almost Entirely Stopped

Bank-only write-offs for all of H1 2019 total Rp851,276 million - but Rp740,616 million of that was already booked in Q1 alone (see Q1 2019's post), meaning Q2 2019 wrote off just Rp110,660 million, a 6.7x deceleration quarter-over-quarter. Recoveries moved the opposite direction within the half: Rp62,046 million in Q1 versus Rp81,253 million in Q2, even as the amount being written off collapsed. Whatever drove Q1's spike - a large single write-off, a policy catch-up, a specific counterparty resolution - it wasn't the start of a sustained higher run-rate; H1's full-year total (Rp851,276 million) is still up sharply from H1 2018's Rp440,823 million, but almost entirely because of one quarter, not two.

Special Mention Loans Set Another Fresh High

Consolidated Special Mention loans reached Rp14,307 billion at Jun 2019, up from Rp10,968 billion at Dec 2018 - well past Q1 2019's own fresh high on a bank-only basis (Rp11,410 billion), though the two figures use different consolidation bases and aren't a precise like-for-like comparison. As a share of total loans this is now 2.53%, up from 1.99% at Dec 2018. This remains the bucket one step above NPL classification, and its continued climb - even as the NPL ratio itself held flat at 1.4% - is the more forward-looking read on credit quality than the ratio's own quarter-to-quarter stability suggests.

CASA Funding Mix Shifted Toward Time Deposits for the First Time in This Series

The CASA ratio slipped to roughly 75.7% (Jun 2019) from roughly 76.2% (Dec 2018) and 77.7% a year earlier, as time deposits grew 18.1% YoY - more than double CASA's own 5.9% YoY growth. This is the first meaningfully sustained CASA decline this series has recorded since Q1 2017's single-quarter slip; every prior quarter through Q1 2019 either held flat or improved. A single half isn't enough to call this a reversal of the multi-year CASA-strength story, but it's worth checking against Q3 2019's own reading rather than assuming the historically strong funding mix is a permanent given.

A Quarter of the Restructured Loan Book Still Isn't Performing

Individual (bank-only) restructured loans classified in an outright NPL bucket (Substandard, Doubtful, or Loss) total Rp2,134,273 million of the Rp8,074,019 million restructured book at Jun 2019 - 26.4% of the total, an improvement from Q1 2019's 31.8%. Most of the remainder sits in the still-performing "Current" bucket (Rp3,349,129 million, 41.5%) with a further 32.1% in Special Mention - together meaning about 73.6% of restructured loans are classified as performing or near-performing, continuing the gradual improvement this series has tracked in this book without it ever fully healing.

BCA's Loan-Loss Coverage Held Comfortably Above 100% of NPL Even as the Ratio Itself Slipped

Bank-only provision coverage of NPL stood at 183.7% at Jun 2019 (consolidated presentation basis), down from 187.8% a year earlier and from 187.0% at Mar 2019, but still comfortably above full coverage - and above Dec 2018's own 178.7% reading. The bank isn't under-provisioned against its current NPL stock; the metric worth tracking is the trend, not the current level.

Undisbursed Committed Credit Facilities Grew Faster Than the Loan Book Itself

Consolidated committed liabilities under undisbursed credit facilities to customers reached Rp151,754 billion at Jun 2019 (the "Others - Committed" line within the commitments and contingencies schedule), up from Rp138,623 billion at Dec 2018 - a 9.5% YTD increase, faster than the 2.6% YTD growth in loans actually disbursed. This is standard commitment-schedule disclosure, not a red flag on its own, but it does mean BCA's contingent lending exposure grew meaningfully faster than its funded loan book this half - worth watching if disbursement rates pick up in a weaker credit environment.

Target Valuation Range

P/E of ~28.7x and P/B of ~4.63x - Bottom line: still too early to call a genuine re-rating - the underlying numbers (a funding-mix shift toward time deposits, a Special Mention bucket climbing further past its Q1 2019 high) are moving in a direction that argues for caution on multiple expansion, even as the headline growth and coverage metrics stay clean.

• P/E^»: ~28.7x, annualizing H1 2019 EPS of Rp522 (×2) against the Rp29,975 June 28, 2019 close - up slightly from Q1 2019's ~28.0x, which itself annualized a single quarter's EPS; this half-year annualization is a somewhat more reliable base than Q1's quarter-only one, but still not a trailing-twelve-month figure.
• P/B^»: ~4.63x, using book value per share of Rp6,474 (equity attributable to owners, Rp159,589,089 million, divided by 24,655,010,000 shares outstanding) - up from Q1 2019's ~4.28x.

Market cap → book value	Q2 2019
Share price (period-end)	Rp29,975
Shares outstanding	24,655,010,000
Market capitalization	Rp739,034B (~$52.32B)
Book value (equity attributable to owners)	Rp159,589B (~$11.30B)
P/B»	~4.63x

P/E and P/B	Q1 2019 (annualized)	Q2 2019 (annualized)	Change
EPS (annualized)	Rp984	Rp1,044	✅ up
P/E»	~28.0x	~28.7x	⚠️ up
Book value per share	Rp6,439	Rp6,474	✅ up
P/B»	~4.28x	~4.63x	⚠️ up

As in every prior post in this series, a full DCF isn't attempted here - a bank with a funding mix now visibly shifting toward costlier time deposits and a Special Mention bucket still climbing isn't a stable enough base yet, even with headline growth and coverage metrics both still healthy. 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 June 2019 quarter yet to compare against.

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