BCA set to beat 2004 profit forecast

BCA set to beat 2004 profit forecast

Bloomberg, Jakarta

Bank Central Asia, Indonesia's second-biggest lender, expects
to beat its 2004 profit forecast as faster economic growth
encourages consumers and companies to borrow more, president
commissioner Eugene Galbraith said.

The Jakarta-based lender had forecast net income to increase
42 percent to Rp 3.4 trillion (US$376.7 million) this year from
Rp 2.39 trillion in 2003.

"The initial guidance we had at the beginning of the year is
clearly going to be exceeded," Galbraith said in an interview.
"Our consumer lending is expanding very nicely. Our loans to
small businesses and to larger enterprises are also showing nice
percentage increases."

Bank Central Asia and other Indonesian banks are benefiting as
interest rates at six-year lows propel faster loan growth in
Southeast Asia's largest economy, and help lenders pare funding
costs. The economy is forecast by the government to expand 4.8
percent this year and 5.4 percent in 2005.

Increased consumer spending, which already makes up 70 percent
of the $208 billion economy, is spurring the construction of more
homes and shopping malls in a nation that votes today in its
first direct presidential election.

Bank Central Asia's first-half net income rose 48 percent to
Rp 1.51 trillion. Consumer loans more than doubled to Rp 4.4
trillion at the end of June.

Bank Central Asia, a unit of U.S. hedge fund Farallon Capital
Management LLC, has targeted extending as much as Rp 10 trillion
in new loans this year, from Rp 9 trillion last year. It expects
to make Rp 4 trillion of new loans in the second half of 2004.

"For this year there is some possibility of exceeding the
target," Bank Central's Galbraith said. Still, "continued growth
from where we are now will be much more difficult because of the
difficulty of finding both good projects and qualified, secure
borrowers."

Bank Central Asia, which runs 761 domestic branches, had Rp
141.74 trillion of assets at the end of June.