PT Bank Central Asia Tbk (BCA) is one of Indonesia’s major banks and the leading payment settlement bank in the country. Supported by a wide range of delivery channels, BCA processes around five million banking transactions daily. To serve more than nine million customer accounts and provide a strong complement of products and services, BCA operates 902 branches, 7,459 ATMs and more than 100,000 EDCs (Electronic Data Capture) located conveniently in commercial, retail and leisure centers nationwide.
BCA is constantly building its long-term transaction banking franchise by offering enhanced convenience and enriched features in its extensive range of products and services. By means of its diversified electronic delivery channels, BCA delivers flexibility and accessibility, allowing customers to do banking transactions at their comfort. By advancing the convenience of internet and mobile banking services, BCA has seen the value of banking transactions through internet banking and mobile banking increase significantly to $211.7bn (up 46.7 percent) and $20.8bn (up 44.5 percent), respectively, during 2010. The value of transactions through ATMs amounted to $104.0bn.
BCA continues to expand transaction banking capabilities by developing cash management services. This range of services for payment, collection and liquidity monitoring enables businesses to better manage their Business-to-Business (B2B), Business-to-Customer (B2C) and Customer-to-Customer (C2C) transactions. BCA developed integrated financing solutions using the value chain-financing approach to support financial transactions of large corporations, integrating their extensive upstream and down-stream business relations. For example, BCA worked with the state-owned oil and gas company’s customers, such as gas stations, oil distributors, and LPG agents, to develop specialized host-to-host applications. One of BCA’s cash management features is the Virtual Account, which systematically facilitates and accounts for payment transactions, thus minimizing a customer’s reconciliation of unidentified payments.
The bank’s convenient, reliable and accessible transactional banking services succeeded in building higher customer trust, translating into a strong funding base. BCA was therefore able to maintain its deposit franchise as transaction accounts continued to dominate the bank’s funding composition. Third party funds grew significantly by 18.1 percent to $30.8bn at December 2010 from $26.1bn the year before. Savings accounts and demand deposits represented 75.5 percent of the bank’s funding portfolio, while the remaining 24.5 percent came from time deposits. As a result, the bank maintained a low cost of funds at 2.95 percent at December 2010. BCA’s liquidity has also been well maintained as it booked secondary reserve funds (such liquid assets as central bank certificates and placements with other banks) of $8.4bn at December 2010.
We took advantage of strength in third party funds and converted them into a dynamic yet prudent expansion of the bank’s diversified loans portfolio. BCA’s liquidity and capital position give strong potential for continued loan growth. Over the past five years, loans grew at CAGR of 25.4 percent while December 2010 loans growth was 29.5 percent.
Domestic economic expansion in 2010 spurred demand for loans in the corporate, commercial and SME sectors. Corporate lending grew by 22.9 percent to $6.2bn while Commercial & SME lending increased by 32.4 percent to $6.8bn. The strong performance in consumer lending reflects the vehicle loan portfolio growth of 34.6 percent to $1.5bn and the 45.2 percent expansion of the mortgage loan portfolio to USD 2.0 billion.
To accomplish its vision to be the bank of choice and a major pillar of the Indonesian economy, BCA continues to deliver quality growth by leveraging-off its strength in transactional banking. BCA had been able to navigate well during the global economic crisis of 2008 supported by its resilient business model. Throughout that difficult period, BCA maintained a solid business and financial performance and the increase in third party funds was a reflection of the trust and confidence that customers have in the BCA brand. Throughout 2010, BCA successfully recorded quality growth by utilizing the momentum of Indonesian’s economic growth.
Indonesia’s strong economic growth in 2010 was driven by continuing high domestic demand and heightened export activities. Supported by a healthy balance sheet, the bank continues to benefit from the vigorous expansion of the Indonesian economy.
As our customers grow their business internationally, BCA provides trade finance services through a fast and competitive service. BCA’s trade finance volume increased by more than 39 percent in 2010, partly due to the world economic recovery and domestic growth.
The bank’s trade facilities include the issuance of Letters of Credit (L/Cs) as well as the pre- and post-shipment financing for exports in the form of negotiated or discounted export bills on L/Cs. In 2009 BCA became the first commercial bank in Indonesia to be a direct participant in the Hong Kong Monetary Authority (HKMA)’s Renminbi clearing system. As such, BCA now facilitates trade transactions in Renminbi, reflecting the Bank’s commitment to serve customer needs.
The bank maintained its performance in remittances sustained primarily by good growth of inward remittance transactions and facilitated by an internet based system known as FIRe (Financial Institution Remittance). This system provides a cost efficient and instantaneous transfer of funds from BCA’s network of correspondent banks and financial institution partners. BCA promotes its inward remittance business in some key markets – the Gulf States, Hong Kong and Malaysia – through further deployment of marketing staff and strategic expansion of the overseas office network. BCA’s correspondent banks now total 1,915 banks in 107 countries, including more than 300 correspondent banks in the Middle East and Asia-Pacific. In early 2010 BCA opened a remittance subsidiary in Malaysia to meet migrant workers’ need for fast and secure remittance to Indonesia. As of December 2010, this remittance company has 4 remittance branches in the Kuala Lumpur area.
BCA provides outward remittance services in 14 major foreign currencies. For remittances to China, BCA offers the China Today (send USD today-receive today), Yuan Remittance (receive full amount in Yuan on the same day) and the RMB Trade Settlement which enables customers to settle their trade payments in Yuan.