BCA expects lending growth to slow

BCA expects lending growth to slow

JAKARTA: PT Bank Central Asia (BCA), Indonesia's largest bank by market value, said lending growth was expected to slow next year because of higher borrowing costs.

The company expects to lend between Rp 8 trillion (US$794 million) and Rp 10 trillion next year, down from more than Rp 11 trillion this year, chief financial officer Jahja Setiaatmadja said in Jakarta on Friday.

Bank Indonesia, the central bank, has raised its benchmark rate five times since July to curb inflation, which surged to a six-year high in October, after President Susilo Bambang Yudhoyono's government more than doubled fuel prices. Higher borrowing costs may lead to slower demand for cars and mortgages, hurting earnings at lenders.

BCA, 51.2 percent owned by San Francisco-based hedge fund Farallon Capital Management LLC, on Oct. 24 said profit for the nine months to Sept. 30 rose 12.4 percent to Rp 2.63 trillion as it boosted lending. -- Bloomberg