JAKARTA (TheInsiderStories) – Indonesian state lender, PT Bank Tabungan Negara Tbk (IDX: BBTN) will issue Rp3.14 trillion (US$219.80 million) local bond by the end of this month. The funds use for loan expansion and other needs.
The bond will be divided into three series, series A valued Rp1.5 trillion with 7.75 percent interest rate and one year maturity, series B valued Rp803 billion with 8.75 percent interest rate and 3 years maturity, and series C valued Rp835 billion with 5 years maturity.
The property-focused bank also considered to explore alternative funding instruments to strengthen liquidity. One of them is by issuing global bonds with values up to $300 million. Previously, BBTN had obtained foreign loans from Australia’ ANZ with a value of $165 million.
Recently, finance director of the bank, Iman Nugroho Soeko giving a grid if the coupons would be 5 to 10 basis points higher than similar instruments issued by PT Bank Rakyat Indonesia Tbk (IDX: BBRI).
In April 22, the lender announced has bought 30 percent or 33,000 shares of PT Permodalan Nasional Madani Investment Management (PNMIM) for Rp114.3 billion. According to President Director of BBTN, Maryono, his party had included a planned to have an investment management company for the periods 2019-2021.
“We want to expand the scope of our business, especially to improve business performance and make the “One Million Houses Program” a success,” he said.
Maryono stated that with the presence of the new subsidiary, the company would be more free to collect and provide long-term low-cost funds. With the option of raising cheaper funds more broadly, the lender hopes to provide a more affordable housing finance scheme for the people of Indonesia.
In addition, the new investment management company is also targeted to increase the company’ fee-based income. The bank plans to sell various investment products with the presence of these subsidiaries.
These include mutual funds, Limited Participation Mutual Funds, Fund Management Contracts, Asset Backed Securities, and Real Estate Investment Funds. The company also targets to sell various wealth management products that will be offered to BBTN Priority customers.
Maryono hopes that the transaction can be completed by June 2019. Meanwhile, in the Bank Tabungan Negara’ business plan for 2019-2021, the lender also targeted to have subsidiaries in the fields of life insurance, general insurance and finance companies.
The formation of various subsidiaries is focused on supporting the provision of affordable homes for the people of Indonesia. The lender also planned to secure synthetic home ownership loans to get funds Rp2 trillion this year.
By raising the funds, its expected support the bank’ housing loan growth. Soeko explained the underlying of this securitization are future cash flows from principal repayments and interest payments from a set of separated mortgage loans. The underlying house ownership loan is a housing loan portfolio that has been chosen and separated.
In addition to securitization, Soeko also confirmed this year it would re-issue the remaining shares of sustainable bonds with total amount up to Rp3 trillion, from the total available quota of Rp5 trillion in this year. He revealed, the wholesale funding plan is also used to pursue loan expansion of 13-15 percent in 2019.
At the of 2018, Bank Tabungan Negara report managed assets worth of Rp308.47 trillion, or up 18.02 percent compared to previous year. Loan growth rose 19.48 percent to Rp237.75 trillion and deposits up 19.09 percent from Rp177.56 trillion to Rp211.46 trillion in 2018.
The bank reaped a net profit of Rp3.2 trillion or only grew Rp5.92 percent. BBTN expect will begin the entry process to BOOK IV in 2020.
Director Strategy, Risk and Compliance Mahelan Prabantarikso, said the process of adding capital to be able to enter the level is most likely through a rights issue. Other ways use assistance from the state-owned holding bank that will be formed in this year.
Last year, the lender’ credit grow 19.48 percent to Rp237.75 trillion compared previous year, while the third party funds rose 19.09 percent from Rp 177.56 trillion to Rp 211.46 trillion from 2017.
Thanks to this achievement, in 2018, Bank Tabungan Negara has managed to reap a net profit of Rp 3.2 trillion or only grew 5.92 percent in annual basis.
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