JAKARTA (TheInsiderStories) – Indonesian lender, PT Bank Tabungan Negara Tbk (IDX: BBTN) plans to securitize assets worth Rp2 trillion by August 2020. In this offer, the state-owned bank is also targeting retail investors.
According to the director, Nixon LP Napitupulu, in a virtual press conference on Friday (7/26), the retail portion is planned to be around 10 – 20 percent of the target. In this publication, it is collaborating with a government-owned financial institution, PT Sarana Multigriya Financial, and PT Mandiri Manajemen Investasi.
Recently, Bank Tabungan Negara has managed to reap Rp1.5 trillion in fresh funds from bond offerings in the domestic capital market. Nixon said the proceeds from the bond issuance will be used to pay off maturing bonds worth Rp5.3 trillion this year.
“(The value) of these bonds is in accordance with our Bank’s Business Plan which will be used to strengthen the development of the housing finance business,” said the company’s President Director, Pahala N. Mansury, in the Investor Gathering of corporate bond issuance on July 21.
He explained, the Bank Tabungan Negara offered the Rupiah bonds in a number of series. Series A with a tenor of 370 days has a coupon indication of 6.25 – 7.15 percent, Series B with a tenor of three years has a coupon indication ranging from 7.40 to 8.40 percent and Series C with a tenor of five years offers a coupon indication in the range of 7.90 percent to 8.90 percent.
Recently, the government has placed Rp5 trillion in funds in the state bank. Mansury said it would distribute the funds to the housing and construction sector.
During the first quarter (Q1) 2020, the credit growth of the Bank Tabungan Negara grew only 4.59 percent to Rp253.25 trillion, from last year’s Rp242.14 trillion.
The interest income was Rp6.17 trillion and loans were Rp253.25 trillion, or rose 4.59 percent from Rp242.13 trillion in Q1 of 2019. The net profit of the lender dropped 36.79 percent to Rp457 billion from the same period the previous year of Rp723 billion.
Earlier this year, global rating, Moody’s Investor Service confirmed the local long-term deposit and Baa2 foreign currency rating of the state-owned bank. At the same time, the agency has assigned a subordinated Ba3 rating for Tier 2 capital in US Dollar.
Moody’s hopes that the quality of the assets of the lender will remain under pressure for the next 12-18 months, as a result of aggressive loan expansion activities since 2015 per government housing program. In addition, the slowing domestic economy will burden the debt service capabilities of bank borrowers given its concentration in the low and middle income segments.
However, the agency hopes that the bank’ profitability will increase slightly over the next 12-18 months. Bank financing costs will also be reduced after cutting reserve requirements and central bank policy levels, and following the easing of liquidity conditions.
Moody’s also anticipates a stable recovery in bank capitalization and a moderate loan growth rate of around 6 percent for 2020. It is said, the long-term deposit rating of the National Savings Bank is at the same level as the Indonesian government. Given the stable outlook on the country’s ranking, upgrading the bank’s deposit rating is not possible.
In 2012 and 2013, Bank Tabungan Negara issued local bond Rp4 trillion bonds. Then in the period of 2015 and 2016 earned Rp6 trillion. And in 2017 and 2019 it received a total funding of Rp9,14 trillion. Since 1989, the bank has issued bonds 23 times, including the last one being a Global Global Bond of US $ 300 Million earlier of this year.
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