BATTLE OF BANKS: BCA vs BRI vs Mandiri vs BNI (part 1) | #GhibahinSaham eps 2

Summary

In this episode of the 'Ghibahin Saham' series, the host dives into the Indonesian stock market, focusing on the finance sector, particularly the banking industry. They explore why BCA, despite not having the highest profits, leads in market capitalization. The discussion breaks down how banks like BCA, BRI, Mandiri, and BNI target different customer segments—from corporate banking to micro lending—and how these strategies affect profitability. The host emphasizes the importance of understanding business models and market dynamics before making investment decisions, offering viewers insights into how to evaluate and interpret financial reports.

Takeaways

• 😀 Understanding the market: Indonesia's stock market is valued at IDR 7,200 trillion, with 35% of this contributed by the finance sector.
• 😀 Why BCA? Despite not having the highest profit, BCA has the largest market value in Indonesia's stock market due to its business model and market trust.
• 😀 Business model breakdown: Banks in Indonesia generally collect money from the public and lend it out for profit, but they differ in how they do this.
• 😀 BCA's business model: Known for transactional or consumer banking, with a high percentage of loans going to individuals for things like mortgages and credit cards.
• 😀 BRI's business model: Specializes in micro banking, focusing on smaller, individual loans with higher interest rates, leading to higher profit margins.
• 😀 Mandiri & BNI's business models: These two banks focus on corporate banking, serving large businesses and offering lower loan interest rates compared to consumer or micro banking.
• 😀 Key insight: Loan types and their interest rates vary significantly across banks. Micro loans tend to have the highest interest rates, while corporate loans have the lowest.
• 😀 Profit margins differ: Banks like BRI, which focus on micro loans, have the highest Net Interest Margins (NIM) compared to others in the market.
• 😀 Focus on business models: Understanding the differences in business models is crucial before evaluating a bank's financial health and profitability.
• 😀 The importance of understanding the 'story': Before jumping into financial numbers, it's essential to grasp the overall story of how a bank operates and earns money.
• 😀 Continuous learning: The script encourages viewers to take their time in understanding these concepts, promoting gradual learning instead of rushing into stock investments.

Q & A

What is the focus of this episode of the stock series?

The focus of this episode is on understanding the Indonesian banking sector, particularly looking at major banks like BCA, BRI, Mandiri, and BNI, and discussing why BCA holds the largest market capitalization despite not having the highest profit.

Why is the banking sector so significant in Indonesia's stock market?

The banking sector represents 35% of the total market value of Indonesia's stock market, making it a crucial part of the economy. Understanding this sector can provide valuable insights into a third of the entire market.

How is the size of a bank’s market capitalization determined?

A bank’s market capitalization is determined by multiplying its stock price by the number of shares in circulation. It reflects the market’s perception of the bank’s value based on various factors like profitability, size, and market influence.

Why does BCA have the largest market capitalization in Indonesia’s stock market?

Despite not having the highest profits, BCA has the largest market capitalization because it is a dominant player in transactional and consumer banking, making it highly influential in Indonesia’s financial ecosystem.

What does 'net income' refer to in banking financial data?

Net income, or profit, refers to the bank’s earnings after all expenses, including operating costs, taxes, and interest payments, have been deducted from total revenue.

Why is BCA’s market capitalization higher than BRI’s even though BRI has higher profits?

BCA’s larger market capitalization is due to its strong position in the transactional banking space, which attracts a high volume of customers and contributes to its market influence. BRI’s higher profits come from micro-lending, which offers higher interest rates but is a smaller segment of the market.

What is the primary business model of BCA?

BCA focuses on **transactional banking** or **consumer banking**, which involves providing services such as savings accounts, credit cards, and consumer loans. It is known for its strong online presence and ease of use for retail customers.

How does BRI’s business model differ from BCA’s?

BRI is known for **micro-banking**, focusing on lending to small businesses and individuals in rural areas. This sector, while smaller, offers higher profit margins due to the higher interest rates on smaller loans.

How do the different banks’ loan breakdowns affect their profitability?

The loan breakdown significantly affects a bank’s profitability. Smaller loans, like those to individual consumers or micro-businesses, tend to have higher interest rates, leading to higher margins. BRI’s focus on micro-lending gives it a higher profit margin compared to BCA, Mandiri, and BNI, which lend more to corporations.

What is the typical interest rate for loans given by these banks?

The interest rate varies based on the segment. For BNI, loans to the small segment are typically around 11.8%, consumer loans are at 10.4%, and corporate loans have the lowest rate at 9.3%. Micro-lending would generally have the highest rates, although this was not specifically listed for BRI.

What lesson can be learned from the comparison of BCA, BRI, Mandiri, and BNI?

The key takeaway is that understanding the specific business model and loan segments of each bank helps investors gauge profitability. While some banks may appear more profitable, their business models differ in terms of risk and reward, which affects both their market capitalization and earnings potential.