Management of BBRI - Photo by PT Bank Rakyat Indonesia Tbk

JAKARTA (TheInsiderStories) – State-owned lender PT Bank Rakyat Indonesia TbK (IDX: BBRI) will issue US$500 million global bonds in third quarter this year, aims to start refinancing its $1 billion debt from China Development Bank (CDB), local wire reported.

The bank’s CEO Suprajarto on Thursday (20/4) said, the loan is intended to finance the company’s long-term loans, including loan for infrastructure development. He added, the capital injection from CDB contributed about 1.2 per cent to total assets, 8.1 percent of capital, and 8.41 percent of BRI liabilities in 2017 financial performance.

The loan agreement with CDB, signed in Beijing, China, was a result of a negotiation between governments of both countries, with Indonesia represented by State-Owned Enterprises (SOEs) Minister Rini Soemarno.

In 2015, CDB has released US$3 billion worth of loans to BBRI, PT Bank Negara Indonesia Tbk (IDX: BBNI), and PT Bank Mandiri Tbk (IDX: BMRI), with a tenure of 10 years. Under the agreement, the three banks will get 30 percent of the loan in Chinese yuan to finance infrastructure projects and trade, especially between the two countries.

Last year, BBRI booked net profit of Rp29.04 trillion (US$2.2 billion), increased by 10.7 per cent from Rp25.5 trillion (US$1.9 billion) in 2016. This achievement makes the bank as the fourth largest entity in South East Asia in term of market capitalization.

In the year, BBRI loans increased by 11.4 per cent year-on-year (yoy) to Rp739.3 trillion ($53.5 billion), compared to Rp663.4 trillion ($47.9 billion) at the end of December 2016.