JAKARTA (TheInsiderStories) – State run lender, PT Bank Tabungan Negara Tbk (IDX: BBTN) is exploring a local bond offering with total amount Rp1.5 trillion (US$107.14 million) in the second semester of 2020, said the director. The issuances part of the bank sustainable public offering since 2017 to 2019 period worth of Rp10 trillion.
The director, Nixon Napitupulu said, so far the company had collected Rp9.14 trillion from the bond offerings. Beside Rupiah bond, last January, the company won $300 million from the issuance of junior global bonds with a 4.2 percent coupon and a five-year tenure to strengthened its capital adequacy ratio.
Early of this year, Moody’s Investors Service on Friday has affirmed the Baa2 long-term local and foreign currency deposit ratings of Bank Tabungan Negara. It also affirmed the bank’s Baseline Credit Assessment (BCA) and Adjusted BCA of ba1.
At the same time, the agency has assigned a Ba3 subordinated rating to the US Dollar-denominated Tier 2 capital securities. Moody’s expects BBTN’ asset quality to remain under pressure over the next 12 – 18 months, as a result of its aggressive loan expansion activities since 2015 per the government’ housing program.
In addition, the slowing domestic economy will weigh on the debt servicing ability of the bank’ borrowers, especially given its concentration in low and middle-income segments and exposure to small and mid-sized developers. Nevertheless, Moody’s expects Bank Tabungan Negara’ profitability will modestly improve over the next 12 – 18 months.
The bank’s funding costs will also decline following the central bank’s cuts in reserve requirements and policy rate, as well as following easing liquidity conditions. Moody’s also anticipates a steady recovery in the bank’ capitalization and a modest loan growth rate of around 6 percent for 2020.
Moody’s said BBTN’ long-term deposit ratings are at the same level as Indonesia’ sovereign rating. Given the stable outlook on the sovereign rating, an upgrade of the bank’s deposit ratings is unlikely.
Recently, the government announced to places around Rp30 trillion funds to the state banks to support the economic recovery program. No further details the placement for Bank Tabungan Negara. But the CEO, Pahala Mansury asserted, his company will distributes the fund for housing and construction sectors.
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