Bank Central Asia’s stress test shows resilience
(18 August 2015 – Indonesia) Bank Central Asia (BCA) president director Jahja Setiaatmadja said Indonesia’s third largest bank would be resilient enough to cope with any impact from the sharp depreciation of the rupiah against the United States dollar.
Jahja said the bank’s latest stress test showed it would be resilient as it had minimal exposure to US dollar-denominated loans.
He referred to the 1998 financial crisis when the share of US dollar-denominated loans in the bank’s total portfolio was around 35 percent and significantly hit the bank when the Indonesian currency fell to as low as Rp 15,000 per US dollar, leading to Indonesia’s worst ever financial crisis.
BCA recently joined a stress test carried out by the Financial Services Authority (OJK) to gauge the impact of the depreciation of the rupiah on its financial performance.
The test was based on a simulation of what would happen if the rupiah fell to Rp 14,000 per dollar.
So far BCA has kept its loan expansion conservative, avoiding non-performing loans (NPLs).
The bank’s NPL for the first half of the year stood at 0.7 percent, still under the average for the country’s banking sector, 2.5 percent.
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