BCA may raise lending to Rp 9t this year
Leony Aurora, The Jakarta Post, Jakarta
Bank Central Asia (BCA), the country's third largest bank in terms of assets, said on Thursday it would channel up to Rp 9 trillion (US$1.07 billion) in lending this year, up from about Rp 7.5 trillion in 2003.
BCA vice president director Aswin Wirjadi said the bank was optimistic the lending expansion would not be interrupted by the 2004 legislative elections, because the real sector still needed fresh funds to run and expand their businesses.
He also said the bank would channel its lending equally to the corporate, retail and consumer sectors.
BCA is aggressively working to boost its revenue by expanding its lending in order to help compensate for a revenue decline from its interest proceeds from recapitalization bonds.
The central bank has been aggressively cutting its benchmark rate to a current level of 8.24 percent, far below the 13 percent at the end of 2002.
The decline has had a heavy impact on BCA because its recap bonds mostly consist of variable net bonds carrying floating rates linked to the central bank's interest rate. When the central bank's interest rate declines, BCA's revenue from recap bonds also declines.
About 95 percent of BCA's total recap bonds, currently worth about Rp 37 trillion, carry a floating rate, which makes them extremely sensitive to fluctuations in the benchmark rate.
Because of this, Aswin said, BCA plans to unload about Rp 10 trillion of its recap bonds this year.
BCA's consumer banking general manager, Stephen Liestyo, said BCA was targeting 100,000 new customers for its mobile banking service and 400,000 transactions valued at Rp 500 billion (US$58.82 million) per month in 2004.
"Our target is to double last year's transaction value," Stephen said.
Thus far, there are about 65,000 regular users of the BCA mobile banking service.
BCA and cellular operator Excelcom, or ProXL, started the mobile banking service three years ago using a special SIM-card containing a program that enables users to perform various banking transactions, such as transferring funds, paying bills and checking balances.
In the past, customers had to register with a Pro-XL office in order to use this service. However, customers no longer need to do this since BCA and Pro-XL launched a new service called Life In Hand, which, among other things, allows customers to register for mobile banking through their cellular phones.
The transaction charges for the new service have also been cut by 50 percent to between Rp 500 and Rp 1,000 per transaction.
BCA also works with Satelindo to provide mobile banking and in three months will launch a similar service with Telkomsel.