Bank Central Asia dropped its plan to impose administrative charges on clients who check their account balances too often at automated teller machines, after a review of the bank's financial situation showed that it can still support the cost. (ID Photo/David Gita Roza)

BCA Agrees to Reduce Interest Rates on Loans


OCTOBER 04, 2015

Jakarta. Bank Central Asia, the country's largest lender by market value, vows to comply with the government's demand to curb banks' lending rates to boost domestic purchasing power. However, the lender said high inflation and depreciating rupiah will make it hard to adjust the rate.

BCA offers a 10.25 percent prime interest rate for corporate loans, 11.50 percent for retail loans, 10.25 percent for mortgages and 8.63 percent for non-mortgage consumption loans.

"Basically, we are ready to lower interest rates if inflation is guarded at a low level and the rupiah exchange rate is back to normal at around 13,000 per US dollar," said BCA president director Jahja Setiaatmadja.

Jahja said the lender's costs will soar if the rupiah stays at its current current level as BCA expenditure for banking equipment and software is in US dollars.

BCA's overhead costs jumped 24 percent to Rp 11.2 trillion ($760 million) in the first semester of 2015 following an increase in branches and automatic teller machines. The lender plans to open up to 60 new branches this year and add up to 2,000 ATMs to its network.

BCA net income expanded at 8.8 percent to Rp 8.5 trillion in the first half of this year from the same period last year, far slower than the 24 percent growth pace of last year.

Previously, the central bank also warned lenders to consider the likely risk of a further depreciation in the rupiah before taking the decision to lower their lending rates.

Still, Bank Indonesia governor Agus Martowardojo said annual inflation in September provided room for lenders to reduce lending rates.

Inflation eased to 6.83 percent last month, slower than the 7.18 percent recorded in August, on the back of lower raw food prices and transport costs, but still hovering above BI's target in the range of 3 percent to 5 percent.

The rupiah has fallen 17.73 percent against the greenback so far this year. It traded at 14,646 per US dollar on Friday, up 0.31 percent from a day earlier.