KimEng Bank Central Asia - Conservative stance to limit loan book growth; Maintain Sell

▬ Bank Central Asia (BCA) recorded in-line FY09 net profit of Rp6.8t (+18% y/y). The bank’s 50% LDR was below the industry average of 73%, as deposits outgrew loan book. Regardless low NPLs and the Central Bank’s plan to disincentivize low LDRs, BCA keeps 2010 loan growth target at 15%, below Bank Indonesia’s target of 17-20% for the industry.

▬ Consumer and SME lending would be the main loan drivers from 2010 and BCA also has plans to acquire a motorcycle financing arm by YE11. The bank has yet to announce details of the acquisition.