Management of PY BanK Rakyat Indonesia Tbk - Photo by Bank Rakyat Indonesia
JAKARTA (TheInsiderStories)PT Bank Rakyat Indonesia Tbk (IDX: BBRI), issued global sustainability bond of US$500million. This is the first issuance by state-owned lender or financial institutions in Indonesia, told the spokesman on Tuesday (03/25).
The US dollar bond has a five-year tenor with a coupon rate of 3.95 percent and is paid semi-annually. The bonds with environmental and social insight schemes is a publication that meets ASEAN’ standards.
Corporate Secretary of BBRI Bambang Tribaroto, said the issuance of bonds has attracted investor interest significantly. These indicated by the amount of demand, which is far greater than the amount offered worth or $4.1 billion or eight times over the total bonds offered at $500 million.
The lender’ global bond issued in 2018 gets a spread of 195 basis points (bps), or 60 bps on global bonds issued by the Indonesian government. The low spread also reflects the low risk of default.
This can be seen from the rating given by the International rating agency, Fitch whith ranks BBB expectations  and Moody’s reward with a Baa2 rating.
The funds from the issuance is one of bank’ alternative funding sources for the small medium enterprises segment, which will strengthen the company business in this segment.
Until December 2018, lending in this sector has reached 76.5 percent of BBRI’ total loans. Overall, Bank Rakyat Indonesia disbursed loan Rp843.6 trillion in 2018 or increase 14.1 percent from last year.

BBRI plans to release sustainable bonds as much as Rp 20 trillion (US$1.42 billion) in this year. Of the total, Finance Director Haru Koesmahargyo, said that the first issuance worth of Rp7-8 trillion and Rp6 trillion in 2020 and 2021. Besides, the bank prepared funds Rp1.5 trillion to acquire general insurance firm.

Furthermore, the chief executive Suprajarto revealed the acquisition of general insurance companies in order to complete the company’s business as a comprehensive financial services provider. He targets, the planned could be carried out by the company in the first semester of 2019.

Last year, one of the largest bank in the country has acquired 97.61 percent shares ofPT BRI Ventura Investama, 68 percent shares of PT Danareksa Sekuritas, and 35 percent PT Danareksa Investment Management shares.

Previously, the bank has acquired 35 percent of PT Bahana Artha Ventura, which is a subsidiary of PT Bahana Pembangunan Usaha Indonesia (BPUI) with worth of Rp71.21 billion. The transaction eroded BPUI’ ownership from 99.45 percent to 64.65 percent and the shares of the BPUI’ Employee Cooperative from 0.55 percent to 0.35 percent.

The State Owned Enterprises (SOEs) ministry has plan to set up financial services holding led by Danareksa. The holding company was planned to be in charge of four state-owned banks, namely, BBRI, PT Bank Negara Indonesia Tbk (IDX: BBNI), PT Bank Tabungan Negara Tbk (IDX:BBTN), PT Bank Mandiri Tbk (IDX:BMRI), and PT Pegadaian.

Consolidation through the establishment of the holding will basically not eliminate the entity of each bank. The country’s banking regulator and the central bank have both been pushing for banks to merge, to shore up equity. The regulators want to halve the number of banks operating across the archipelago from around 120.

The four banks have, under an Association of State-Owned Banks Association, already merged their ATM networks and set up a single switching company to manage the system.

US$1: Rp14,100

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