Bank Central Asia – EPS growth set to accelerate
YTD BBCA has seen a declining trend in its CoF due to its strong CASA base. We lower out CoF by 35bps accordingly and this has lifted our FY17F EPS by 4% which implies a growth of 15% YoY. We also raise BBCA’s valuation back to its 10-year average of 3.3x PBV (vs. 3.2x previously) which increases our TP by 10% to IDR17,000. We believe higher multiple is justified on improving loan quality and higher NPL coverage formation in FY17. Maintain BUY.