Income Statements (in billion Rupiah)
2019 2018 2017 Increase / (decrease) 2019 Increase / (decrease) 2018
Nominal % Nominal %
Operating Income 71,622 63,034 56,982 8,588 13.6% 6,052 10.6%
Net Interest Income 50,477 45,291 41,827 5,186 11.5% 3,464 8.3%
Interest Income 63,838 56,767 53,768 7,071 12.5% 2,999 5.6%
Interest Expense (13,361) (11,476) (11,941) (1,885) 16.4% 465 -3.9%
Operating Income other than Interest 21,145 17,743 15,155 3,402 19.2% 2,588 17.1%
Impairment losses on assets (4,591) (2,676) (2,633) (1,915) 71.6% (43) 1.7%
Operating Expenses (30,742) (27,651) (25,190) (3,091) 11.2% (2,461) 9.8%
Income before Tax 36,289 32,707 29,159 3,582 11.0% 3,548 12.2%
Net Income 28,570 25,852 23,321 2,718 10.5% 2,531 10.9%
Income / (Expenses) Other Comprehensive 2,568 910 755 1,658 182.2% 155 20.5%
Total Comprehensive Income 31,138 26,762 24,076 4,376 16.4% 2,686 11.2%
Net Income attributable to:
Equity holders of parent entity 28,565 25,855 23,310 2,710 10.5% 2,545 10.9%
Non-controlling interest 5 (3) 11 8 na (14) na
Comprehensive Income attributable to:
Equity holders of parent entity 31,132 26,766 24,064 4,366 16.3% 2,702 11.2%
Non-controlling interest 6 (4) 12 10 na (16) na
BCA booked net profit of Rp28.6 trillion, growing by 10.5% and supported by solid operating income, efficiency initiatives and sound asset quality. Operating income grew by 13.6% thanks to strong growth in net interest income of 11.5%, and an increase in operating income other than interest of 19.2%, particularly income from fees and commissions.
Net Interest Income (in billion Rupiah)
2019 2018 2017 Increase / (decrease) 2019 Increase / (decrease) 2018
Nominal % Nominal %
Interest Income 63,838 56,767 53,768 7,071 12.5% 2,999 5.6%
Loans 49,583 43,519 40,014 6,064 13.9% 3,505 8.8%
Placements with Bank Indonesia and Other Banks
1,322 941 874 381 40.5% 67 7.7%
Securities 8,372 7,600 8,603 772 10.2% (1,003) -11.7%
Consumer Financing and Investment in Finance Leases
2,954 3,016 3,077 (62) -2.1% (61) -2.0%
Others (Including Sharia revenue sharing) 1,607 1,691 1,200 (83) -4.9% 491 40.9%
Interest Expense 13,361 11,476 11,941 1,885 16.4% (465) -3.9%
Current Accounts 1,542 1,399 1,274 143 10.2% 125 9.8%
Savings Accounts 1,867 2,379 2,632 (512) -21.5% (253) -9.6%
Time Deposits 7,997 5,902 6,346 2,095 35.5% (444) -7.0%
Others (Including Sharia expenses) 1,955 1,796 1,689 159 8.9% 107 6.3%
Net Interest Income 50,477 45,291 41,827 5,186 11.5% 3,464 8.3%
Interest Income
Interest income grew by 12.5% to Rp63.8 trillion, driven by solid loan growth and the impact of the adjustment in interest rates. Interest income from loans contributed 77.7% to total interest income, while the remainder was from government bonds and placement with the central bank.
Interest income from loans expanded by 13.9% to Rp49.6 trillion, triggered by growth in loans, particularly from the corporate and commercial and SME segments. In 2019, loans grew by 9.1%, with corporate and commercial & SME loans growing by 11.8% and 12.8%, respectively.
Composition of Interest Income
Rp63.8 trillion Rp56.8 trillion Rp53.8 trillion
77.7%
13.1%
4.6%2.1% 2.5%
76.7%
13.4%
5.3%
1.6% 3.0%
74.4%
16.0%
5.7%
1.6% 2.3%
2019 2018 2017
Loans Securities Consumer Financing and Investment in Finance Leases
Placements with Bank Indonesia and Other Banks Others (Including Sharia revenue sharing)
In the second semester of 2018, BI’s 7-day reverse repo rate trended up with a total increase of 75 bps to 6.0%
at the end of 2018, and maintained until the first half of 2019. In the second semester of 2019, BI’s policy rates were reversed and declined to 5.0% at the end of the year, lower by 100 bps compared with end of the previous year.
BCA adjusted its lending rate accordingly in response.
While interest increases took place in the second semester of 2018, higher impact was seen in 2019. The Bank recorded 15 bps higher loan yield in 2019 to 8.99%, despite lower lending rates in the second semester as BI’s policy rates started to decrease.
Interest Expenses
Interest expenses posted an increase of 16.4% to Rp13.4 trillion in 2019. This was particularly due to the 35.5% or Rp2.1 trilion increase in interest expenses from time deposits, in line with the growth in total time deposits. Interest expenses from time deposits accounted for 59.9% of total interest expenses, an increase of 850 bps from 51.4% in 2018.
Composition of Interest Expense
11.5%
14.0%
59.9%
12.2% 10.7%
Current Accounts Savings Accounts Time Deposits Others (Including Sharia expenses)
20.7% 22.0%
51.4% 53.2%
14.1%
15.7%
14.6%
2019
Rp13.4 trillion Rp11.5 trillion Rp11.9 trillion
2018 2017
The increase in interest expenses was also caused by deposit volume and the adjustment in deposit rates in the second semester of 2018, following several BI policy rate hikes. The impact was also reflected in the interest expenses on time deposits in 2019.
In line with the 7-day repo rate, BCA reduced its deposit rate by 125 bps throughout the year. However, as the Bank’s third party funds composition was dominated by CASA, its overall cost of funds was low at 1.9%.
Net Interest Income and Net Interest Margin
Net interest income was Rp50.5 trillion, an increase of 11.5% or Rp5.2 trillion compared with 2018. The net interest margin slightly increased by 10 bps to 6.2%.
41.8 45.3 50.5
2017 2018 2019
4.1%
8.3%
11.5%
Net Interest Income (in trillion Rupiah)
Year on Year (YoY) Growth Earning Assets Yield
Cost of Funds
Net Interest Margin (NIM)
2.02% 1.81% 1.93%
7.87% 7.61% 7.92%
2017 2018 2019
6.19% 6.13% 6.24%
Net Interest Margin - NIM (non consolidated)
Operating Income other than Interest
Operating income other than interest grew by 19.2% to Rp21.1 trillion, attributed to the growth in income from fees and commissions which contributed 64.4% to total operating income other than interest. Other operating income also increased significantly by 38.8% to Rp4.1 trillion.
Operating Income other than Interest (in billion Rupiah)
2019 2018 2017 Increase / (decrease) 2019 Increase / (decrease) 2018
Nominal % Nominal %
Net Fee and Commission Income 13,609 11,996 10,386 1.613 13.4% 1,610 15.5%
Net Trading Income 3,456 2,807 1,803 649 23.1% 1,004 55.7%
Other Operating Income 4,080 2,940 2,966 1.140 38.8% (26) -0.9%
Operating Income other than Interest 21,145 17,743 15,155 3.402 19.2% 2,588 17.1%
Income from fees and commissions (nett) grew by 13.4%, particularly from the growth in income from Customer’s Deposits and credit cards. Income from these two components contributed 60.7% to total income from fees and commissions.
Net Fee and Commission Income (in billion Rupiah)
2019 2018 2017 Increase / (decrease) 2019 Increase / (decrease) 2018
Nominal % Nominal %
Deposits from customers 4,515 4,062 3,584 453 11.2% 478 13.3%
Credit cards 3,748 3,259 2,772 489 15.0% 487 17.6%
Payment settlement 1,995 1,560 1,472 435 27.9% 88 6.0%
Loans receivable 1,649 1,492 1,354 157 10.5% 138 10.2%
Remittances, clearings, and collections 332 317 300 15 4.7% 17 5.7%
Others 1,371 1,308 906 63 4.8% 402 44.4%
Total 13,610 11,998 10,388 1,612 13.4% 1,610 15.5%
Fee and commission expense (1) (2) (2) 1 -50.0% - 0.0%
Net Fee and Commission Income 13,609 11,996 10,386 1,613 13.4% 1,610 15.5%
Income from fees and commissions derived from deposits from customers grew by 11.2%, with more than 75%
from the monthly administration income charged to CASA accounts supported by number of customer growth.
Customer accounts grew by 14.2%, to more than 21 million. The launch of the online account opening facility through BCA Mobile gained interest, contributing 16.1%
of the total new customer accounts. Overall, the bank booked robust growth in the number of transactions of 34.5% compared with the past three years, particularly underpinned by transactions through internet and mobile banking networks.
Income from credit cards grew by Rp489 billion at 15.0%, consistent with the growth in credit card transactions and network switching activities. Income from payment settlement grew by 27.9%, due to the substantial increase in virtual account transactions.
BCA continuously carried out initiatives to improve its transaction banking franchise, to support growth in the number of customers, as well as the number of transactions performed through its payment ecosystem.
Income from trading transactions grew by 23.1% to Rp3.5 trillion, particularly due to the increase in unrealized gains from the fair value of financial assets held for trading, which came from higher returns from swap transactions.
Amid Rupiah volatility, BCA placed its foreign exchange liquidity in Bank Indonesia, and conducted hedging on USD swap sell forward. The transaction mitigated foreign exchange risk and at the same time provided non-interest income.
Other operating income at Rp4.1 trillion, grew remarkably by 38.8% at Rp1.1 trillion. This particularly came from the income received from the payment of written off loans of Rp0.5 trillion. The growth was also due to the increase in insurance premium income booked by BCA Life and BCA Insurance of Rp0.3 trillion.
Operating Expenses
BCA always manages its operating expenses efficiently and effectively to support business growth. In 2019, operating expenses grew by 11.2% to Rp30.7 trillion, mostly caused by personnel expenses with its cost efficiency ratio remaining at 43.7%, lower than last year of 44.3%. For the last five years, the growth in operating expenses had been consistently with a five-year CAGR of 10.8%.
Operational Expenses (in billion Rupiah)
2019 2018 2017 Increase / (decrease) 2019 Increase / (decrease) 2018
Nominal % % %
General and Administrative Expenses 14,115 13,026 12,306 1,089 8.4% 720 5.9%
Personnel Expenses 13,337 12,143 11,335 1,194 9.8% 808 7.1%
Others 3,290 2,482 1,549 808 32.6% 933 60.2%
Total 30,742 27,651 25,190 3,091 11.2% 2,461 9.8%
General and Administrative Expenses (in billion Rupiah)
2019 2018 2017 Increase / (decrease) 2019 Increase / (decrease) 2018
Nominal % Nominal %
Office supplies 4,659 4,315 4,015 344 8.0% 300 7.5%
Communication 1,734 1,467 1,230 267 18.2% 237 19.3%
Depreciation 1,694 1,667 1,645 27 1.6% 22 1.3%
Repair and Maintenance 1,517 1,285 1,427 232 18.1% (142) -10.0%
Rental 1,420 1,446 1,349 (26) -1.8% 97 7.2%
Promotion 1,118 1,109 998 9 0.8% 111 11.1%
Professional fees 526 448 545 78 17.4% (97) -17.8%
Amortisation of Intangible assets - software 322 414 176 (92) -22.2% 238 135.2%
Water, electricity and fuel 288 285 281 3 1.1% 4 1.4%
Computer and software 204 103 160 101 98.1% (57) -35.6%
Tax 156 121 112 35 28.9% 9 8.0%
Others 477 366 368 111 30.3% (2) -0.5%
Total 14,115 13,026 12,306 1,089 8.4% 720 5.9%
General and administrative expenses grew by 8.4% to Rp14.1 trillion, in line with rising expenses allocated to support daily operations, development of the office network and investment in information technology.
Office expenses consisting of daily operational expenses to support transaction banking services grew by 8.0%
to Rp4.7 trillion. A higher proportion of ATM cash recycling machines (CRM) to total ATMs helped contain the growth in daily operational expenses, particularly related to outsource expenses for managing cash in ATM machines. The CRM machines are located in strategic sites to facilitate both cash withdrawal and deposits.
This strategy reduces the need to replenish cash in ATM machines, which subsequently reduced costs.
For the past several years, BCA has developed digitalization and automation initiatives by leveraging on technology to improve efficiency. The Bank’s consistency in strengthening its digital banking service capabilities has resulted in the shifting in transactions toward digital channels, particularly internet and mobile banking.
The number of transactions through these two digital channels represented 74.1% of total transactions. This is in line with the shift in customer behavior and also helped contain the growth of branch offices and ATMs.
Communication expenses grew by 18.2% to Rp1.7 trillion, primarily related to the growth in transaction volume and frequency which increased the processing cost paid
to principals such as Visa and Mastercard. Repair and maintenance expenses rose by 18.1% due to software development and payment for software licenses, aligned with the development of various IT initiatives.
Employee expenses grew by 9.8% to Rp13.3 trillion compared with Rp12.1 trillion in 2018. This was particularly due to the annual adjustment in salary and allowances, bonus expenses, and other allowances. In 2019, new employees recruited totaled 1,483, with 13.3%
working in jobs related to information technology.
Allowance for Impairment Losses on Financial Assets
BCA allocated allowance for impairment losses on financial assets (CKPN) in accordance with applicable accounting standards, and based on the quality of financial assets.
At the end of 2019, CKPN was Rp15.8 trillion, adequate to cover any losses arising from non performing financial assets.
The allocation for CKPN was established with reference to the application of the PSAK 50 and 55 regulations, where loans were assessed individually or collectively.
Individual assessments are made of loans that have significant value individually, namely the corporate and commercial segments, which have objective evidence of impairment. Collective assessment is made for SMEs and consumers, as well as corporate and commercial loans which individually have no evidence of impairment.
Movement of Allowance for Impairment Losses on Financial Assets (in billion Rupiah)
2019 2018 2017 Increase / (decrease) 2019 Increase / (decrease) 2018
Nominal % Nominal %
Beginning Balance 14,449 14,634 13,915 (185) -1.3% 719 5.2%
Adjustment beginning balance of new acquired Subsidiary
5 - - - na - na
Addition of Allowance During the Year 4,591 2,677 2,624 1,914 71.5% 53 2.0%
Assets Written-off During the Year (-/-) 3,283 3,054 2,149 229 7.5% 905 42.1%
Recoveries on Assets Previously Written-off 31 147 235 (116) -78.9% (88) -37.4%
Exchange Rate Differences & Others (20) 45 9 (65) -144.4% 36 400.0%
Ending Balance 15,773 14,449 14,634 1,324 9.2% (185) -1.3%
Allowance for impairment losses on financial assets was increased Rp1.3 trillion in 2019 amounting to Rp15.8 trillion at the end of the year. This increase particularly came from additional allowances during the year in line with the increase in non performing loans. The allowance for impairment losses on loans contribution reached 94.5% of total allowance for impairment losses on financial assets. With expenses on allowance for impairment losses on loans reported during the year, cost of credit was increased to at 0.8%, with a coverage ratio of 189.2%
Income Before Tax
Income before tax grew by 11.0% in 2019 from Rp32.7 trillion to Rp36.3 trillion, supported by higher operating income of 13.6% compared with a year ago.
The return on assets (ROA) was 4.0% at the end of the year, stable compared with a year earlier.
Income Before Tax (in trillion Rupiah) Return on Assets (ROA) - non consolidated
29.2
32.7
36.3
2017 2018 2019
3.9% 4.0% 4.0%
Net Income
Net income grew by 10.5% to Rp28.6 trillion in 2019, supporting the Earnings per Share (EPS) increase from Rp1,049 per share in 2018 to Rp1,159 per share in 2019.
Return on Equity (ROE) reached 18.0% in 2019. BCA always maintains a balance between the need for capital to support business growth and shareholder interest. For the last five years, the Bank’s dividend payout ratio was 21%-33% of net income.
Net Income - Attributable to the Parent Entity (in trillion Rupiah)
Return on Equity (ROE) - non consolidated
23.3
25.9
28.6
2017 2018 2019
19.2% 18.8% 18.0%
Statement of Comprehensive Income
The statement of comprehensive income records changes in equity over a period of time which is not booked under the traditional income statements, including transactions with shareholders.
Comprehensive Income (in billion Rupiah)
2019 2018 2017
Net Income 28,570 25,852 23,321
Other Comprehensive Income:
Items that will not be reclassified to profit or loss
Remeasurements of defined benefit liability (341) 410 (850)
Income tax 70 (284) 213
Revaluation surplus of fixed assets 769 2,164 (4)
Items that will be reclassified to profit or loss
Unrealized (gains) losses for available-for-sale financial assets 2,605 (1,865) 1,875
Income tax (519) 457 (468)
Foreign exchange differences arising from translation of financial statements in foreign currency
(16) 28 (2)
Others - - (9)
Total Other Comprehensive Income 2,568 910 755
Total Comprehensive Income 31,138 26,762 24,076
Net Income attributable to:
Equity holders of parent entity 28,565 25,855 23,310
Non-controlling interest 5 (3) 11
Comprehensive Income attributable to:
Equity holders of parent entity 31,132 26,766 24,064
Non-controlling interest 6 (4) 12
Earning per Share attributable to Equity Holders of The Parent Entity (in full amount of Rupiah)
1,159 1,049 945
BCA’s comprehensive income showed a solid performance. Total comprehensive income that can be attributed to the equity holder of the parent entity increased by 16.3% to Rp31.1 trillion. This was driven by growth in net income of 10.5% to Rp28.6 trillion, in line with solid operating income from the interest income generated from loans and fee based income.