Indonesia’s Bank Central Asia has been crowned Best Asian Bank for the second consecutive year, the clear winner among best financial institutions honoured at FinanceAsia’s award ceremony at the Four Seasons in Hong Kong on Thursday night.
The bank stood out from the 17 winners of 2017 Country Awards for Achievement programme, thanks to its simple but effective business model: it takes in as many low-cost deposits as possible and then lends to strategically selected sectors for higher yields.
The strategy has allowed the company to grow at a steady rate and pay increasing dividends for the past decade.
Jahja Setiaatmadja, president director and chief executive of BCA, accepted the award in front of about 200 peers from the region. He said the bank’s dominance in Indonesia’s payment system is key to BCA’s success, resulting in a lower funding cost and higher profitability.
“Payment settlement is very important for business, like the blood in our body. It flows and it [supports] all the businesses,” said Setiaatmadja on the sidelines of the event.
FinanceAsia's Best Asian Bank award is decided by comparing all the award winners from 16 regions across a variety of metrics. BCA beat the competition with the highest profitability on every metric we looked at – including operating profit to average assets, net interest margins and return on average assets. Its net interest margin stood at more than 6%, double the average of all the best country banks.
Alongside its good performance, the best Asian bank is also keeping up with technology trends, embracing instead of confronting the rise of financial technology, the disrupter of traditional banking. Setiaatmadja said BCA had launched a venture capital fund to invest in fintech companies and collaborated with existing players through its widespread instant payment system in the nation.
“[Fintech] is a must,” said Setiaatmadja. “Even though they have their wallets, our payment system in Indonesia is very convenient. We have a lot of customers already. I think they cannot live without our services.”
