Bank Central Asia (BCA) is known in the banking industry for having a healthy debt level composed of gross non-performing loan ratio of 1.4% in the first half of 2019, very much below the industry's 2.5%, and a valuation exceeding $50 billion.
President Director Jahja Setiaatmadja said that this month, he expects the bank to achieve its loan-growth target for the year of as much as 11%.
Such an achievement was accomplished in small ways.
Soon after Armand Wahyudi Hartono became BCA's vice president director, he took note of the half-empty glasses of water left by the staff.
The next day, he took control and the amount of drinking water in Indonesia's largest non-state bank was drastically cut.
The focus on reining in costs didn't stop with the water limits.
BCA has an imposed internet quota for all of its staff including senior employees.
Even its meeting rooms aren't free with departments having to pay to use them.
Bloomberg data shows the bank's operating-expense ratio at 63%.
The attention to the smallest detail was how this lender cut down expenses, boost efficiency and got investors.
BCA's shares had been going up every year since it went public in 2000.
The only time the bank's stocks didn't go up was during the global financial crisis of 2008.
Bharat Joshi, Jakarta-based investment director for Aberdeen Standard Investment Indonesia, which owns more than 170 million BCA shares, said that this high valuation is not surprising because the company has a good defensive holding.
He also stressed the "strong management capabilities and proven track record" of BCA.
Likewise, BCA is benefiting from the growing number of the middle class in Indonesia, which also happens to be Southeast Asia's biggest economy.
Indonesia has more than 260 million people.
Taye Shim, director of capital markets at PT Mirae Asset Sekuritas Indonesia, said that "Indonesians are getting richer at a much faster pace" and are "saving more money" in a bank preferred by "smarter and richer Indonesians, BCA."
Pauline Ng, head of Asean equities at JPMorgan Asset Management, which oversees $3 billion in Southeast Asia affirmed that BCA has the superb ability in attracting depositors but also is very good at underwriting policies.
She also said that because it is privately run, the decisions are always made on an economic basis.
Sebastian Tobing, an analyst at PT Trimegah Sekuritas, points out that it's hard to ignore two decades of good share performance saying "It's a bank you want to own."
He added that BCA is at a premium price because investors can sleep well.
