BCA trims profit forecast

BCA trims profit forecast

Bank Central Asia said on Wednesday it has revised downward its net profit forecast this year to Rp 2.8 trillion (US$337.34 million) from Rp 3.4 trillion previously due to the recent fall of interest rates.

"The recent fall of interest rates will hurt our interest income this year," BCA managing director Jahja Setiaatmadja told reporters.

The one-month benchmark Bank Indonesia SBI promissory notes fell to 9.53 percent Wednesday from 9.71 percent last week. The SBI rate has fallen from around 13 percent early this year.

BCA, like most local lenders, continues to depend on government bonds to help earnings after the regional financial crisis.

Jahja said his bank is looking at buying bonds issued by large Indonesian companies to compensate for the expected fall in interest income due to falling interest rates.

Many companies have recently issued bonds with attractive coupon rates.

He said the bank will also cut its mortgage rate from 19 percent currently to around 15 percent to attract more customers.

Last year, the bank's net profit fell 19 percent on year to Rp 2.54 trillion. -- Dow Jones