Indonesia's biggest and most expensive bank in terms of valuation, PT Bank Central Asia (BCA), is the talk of global markets after the bank posted nine-month net profit increases of 13 percent. Industry experts said the lender's stringent cost-control ways may have played a key role in its good standing among investors.
The bank said on Monday that net profits rose to 20.9 trillion rupiahs during the first nine months of the year. The said amount is a 13 percent increase from last year's 18.5 trillion rupiahs in net profits.
BCA president director Jahja Setiaatmadja attributed the bank's profit growth this year to an increase in business loans in different segments. While extra loans this year could have helped drive profits up, some industry analysts said the interest in BCA may also be attributed to cost-cutting strategies.
Over the years since it went public in 2000, the BCA has been recognized as a stringent lender that works hard to retain healthy debt levels. Compared to other global banks or financial institutions in the Asia-Pacific region, the Indonesian bank has very low operating expense records.
The bank's stringent ways are once again in the spotlight following reports on Sunday about BCA vice president director, Armand Wahyudi Hartono's move of restricting the amount of drinking water available for employees at the headquarters.
Bloomberg reported that Hartono noticed staff members leaving glasses with water in them after a day's work. He then restricted the number of water employees can access. Industry experts pointed out that Hartono's announcement is just another one of BCA's cost-cutting strategies.
To some, the Indonesian lender may be going beyond the line in terms of expense-cutting. However, it has also helped the bank establish a good standing in global markets as it has become the most expensive lender with a valuation of over $50 billion.
It's not just water that BCA cut down on, but also on internet use. There is an internet quota for every employee in the company, even those in senior positions.
Aside from water and internet use, the Indonesian bank is also known for making each department pay for the time they will use meeting rooms in the headquarters. These cost-cutting strategies have given the lender a seriously low operating-expense ratio of 63 percent.
BCA is recognized as the biggest lender trading under the Jakarta Stock Exchange Finance Index. This year, shares are up by 19 percent. The latest data that the uptrend of BCA stocks added around $9 billion to the bank's overall market value.
