BCA expects 50 percent increase in house loans

Andi Haswidi, The Jakarta Post, Jakarta

Publicly listed Bank Central Asia (BCA) plans to boost its housing loans by 50 percent to about Rp 6.45 trillion (some US$715 million) this year from Rp 4.3 trillion last year to cash in on the revival in the country's property market.

BCA managing director Suwignyo Budiman told a press briefing in Jakarta on Wednesday that the demand for housing loans had grown rapidly in the first quarter amid renewed interest in real estate.

"The total value of loan applications in the first quarter of this year amounted to Rp 3 trillion, which was beyond our expectation of between Rp 1 trillion and Rp 1.5 trillion," he explained.

He said that the value of the nation's total housing loans was expected to grow from Rp 72.7 trillion last year to Rp 90.9 trillion this year.

"We are serious about becoming the next dominant player in the mortgage market. Currently, we are the second biggest," he said.

"We are going to roll out various home mortgage programs this year, and are expecting to attract about six million customers," he said.

Suwignyo explained that the bank's total housing loans of Rp 4.3 trillion last year accounted for almost half of the bank's total consumer finance loans in 2006, which amounted to Rp 9 trillion.

BCA housing loans manager Gregorius Hariyanto said that the bank was planning to increase the share of housing loans to 80 percent of overall consumer finance lending.

"Consumer finance lending itself accounts for about 20 percent of our total lending. We expect consumer finance lending to grow 50 percent this year, and that housing loans will account for 80 percent of the total," he said.

The bank's net profit rose by nearly 18 percent to Rp 4.24 trillion last year on the back of strong growth in both fee-based income and lending.

Its fee-based income was up by almost 10 percent to Rp 1.6 trillion, enough to offset losses in the foreign exchange and other income categories.

BCA's lending last year saw particularly healthy growth in commercial, and small and medium enterprise lending, which was up 16 percent to Rp 29.19 trillion, and corporate lending, which rose 19 percent to Rp 23.92 trillion.
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