JAKARTA (TheInsiderStories) - State lender, PT Bank Rakyat Indonesia Tbk (IDX: BBRI) aborted the bond issuance caused the current liquidity enough to support the loan growth 6 - 7 percent in this year, said the CEO virtually on Friday (01/29). Early 2020 the company had intended to release new bond Rp5 trillion, however, was canceled due to the COVID-19 pandemic.
Based on permit from the Financial Service Agency, one of the largest bank in the country has a slot to releases up to Rp15 trillion (US$1.07 billion) in 2021 after released Rp5 trillion of local bond in 2019. The CEO, Sunarso, stated, “Our LDR (loan to deposit ratio) still high at 83.7 percent and enough to cover the loan growth aroun 6 - 7 percent.”
Amid the low demand and weak loans distribution, he reported, Bank Rakyat Indonesia’ net profit dropped by 45.70 percent to Rp18.66 trillion throughout 2020 from a year ago Rp34.37 trillion. Until the end of December 2020, total outstanding loans recorded Rp938.37 trillion or grew 3.89 percent in annual basis.
Last year, Indonesian government has placed funds Rp30 trillion to state-owned banks (HIMBARA) and assigned the largest small and medium enterprises lender to disburse Rp122.5 trillion worth of loans as part of an effort to implement a national economic recovery program.
The allocated funds come from the government fund in Bank Indonesia. According to Law Number 2/2020 concerning on State Financial Policy and Financial System Stability for Handling the COVID-19 and finance ministerial decree Number 70/2020 regarding the placement of state money in commercial banks, minister of finance will forge the government fund to the state lenders in the context of accelerating economic recovery.
Finance minister, Sri Mulyani Indrawati admitted has written a letter to BI to move the state funds in central bank to the national banking sector to recover the real sector. She added, the banks not allowed to use the placement funds to buy state bond or foreign currency.
“In this context we will make a cooperation agreement with the CEO of the state banks association. The coupon rate 80 percent of BI-7DRR rate,” she adds.
So far, the capital injection not gave a big impact to the banking industry and the businesses caused of the low demand amid the pandemic. The national bank has forced their business plans due to the poor condition.
US$1: Rp14,000
Written by Editorial Staff, Email: theinsiderstories@gmail.com
