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