3Q25 Results: Backed by CASA

Expected 3Q25 results underpinned by solid CASA. In 3Q25, BBCA booked consolidated net profit of IDR 14.4tn (-3.3% QoQ, +1.3% YoY), in-line with our estimate (74.9% of FY25) and consensus’ (75.1%), supported by stable NII of IDR 21.4tn (-0.2% QoQ) and solid non-interest income growth (+9.6% QoQ). Loan growth stood at 7.6% YoY, with significant contribution from corporate loans (+10.4% YoY), particularly in investment and working capital facilities. Deposit growth remained solid at 7.0% YoY, with CASA extending its performance (+9.1% YoY), pushing CASA ratio to 83.8%. CoC for the quarter was slightly higher at 0.6% (vs. 0.5% in 2Q25), as the bank continued to build buffers amid softening asset quality in segments of consumer and auto loans.

Pushing loan growth in key segments while maintaining assets quality. Going forward, BBCA plans to capitalize on loan growth opportunities from SME and consumer sectors, particularly in downstream industries and renewable energy. In addition, the management aims to boost CASA by improving its ecosystem and strengthening integration between online and offline channels. While the potential to lift loan yields exists, maintaining good assets quality remains BBCA’s top priority. Any yield adjustments will be implemented cautiously to ensure credit quality is not compromised.

Cautiously optimistic outlook. BBCA maintains its 2025 loan growth target at 6–8%, much lower than FY24’s level of 13.8%. While the bank expects another 25bps cut in 7-day repo rate by year-end, it has kept its FY25 NIM forecast at 5.8%, with management expecting lower CoF to offset pressures on loan yields. With CASA growing 9.1% YoY, BBCA continues to deliver strong transaction performance, largely thanks to its digital ecosystem. The bank has also maintained CoC guidance at 50bps, reflecting a cautious stance. In terms of asset quality, although NPL ratio remains under control, BBCA is actively managing potential risks, particularly in its consumer loan portfolio, including auto and mortgage segments.

Top pick in the sector with TP of IDR 9,600 (3.7x PBV) - BUY. We like BBCA due to its excellent asset quality, high CASA and sector-highest ROE of 24.1% (FY24: 24.8%). The superior return is supported by disciplined operating expense management with FY25 CIR target of 32%. BBCA's leading digital bank status, demonstrated by 78% increase in mobile and internet banking transaction volumes over the past three years and rollouts of new features such as multi-currency wallets and NFC payments, continues to support sustainable CASA growth. Therefore, we maintain our TP at IDR 9,600 (2026F PBV of 3.7x) on sector relative valuation despite derating in other banks to sector PBV of 2.5x. Key downside risks: rising NPLs,  prolonged NIM pressure and further derating in SOE banks.