Bank Central Asia (BCA): Model Update

J.P. Morgan updates its model on Bank Central Asia (BCA) following 2Q26 results, maintaining a Neutral rating. EPS changes for FY26/27/28E are limited as higher credit costs offset higher NIM; RoE forecasts are 20.2%/20.4%/20.4%, and EPS estimates are 3%/5%/8% below Bloomberg consensus. The DDM-derived price target is reduced to Rp5,900 (from Rp6,000) as the risk-free rate estimate rises from 7% to 7.5%, with the PT end-date rolled forward to Dec-27. BCA has one of the best deposit franchises across EM, underpinned by an 84% CASA ratio, and its cost/income ratio is expected to hold at 32-33% over 2026-28. The rate-hike cycle should drive modest NIM expansion through 2027-28, but macro and asset-quality risks keep gross credit costs elevated at 71-87bps, partly offsetting the NIM benefit.