JAKARTA (TheInsiderStories) – Indonesia’s lender, PT Bank Tabungan Negara Tbk (IDX: BBTN) plans to issue bonds with a total value of US$461 million. The bonds consist of rupiah-subordinated bonds of Rp3 trillion ($211 million) and junior global bonds of $200 million to $250 million, management said on Monday (8/19).
Director of Collection & Asset Management BTN Nixon Napitupulu explained, the company plans to issue rupiah-subordinated bonds before the end of December 2019. While for junior global bonds, they will be issued in the fourth quarter of 2019, November 2019 or no later than January 2020.
The debt issuance will be used to increase the capital adequacy ratio (CAR) to 19 percent. By the increasing of CAR, the company can expand quickly.
Furthermore, the company also plans to increase its share ownership in PT Permodalan Nasional Madani Investment Management (PNMIM) to 60 percent. To date, the company is awaiting approval to increase ownership by 30 percent in PNMIM.
The company is also waiting for a shareholder’s decision to form a venture capital company. The company will later be used to accommodate Finarya transactions and fintech acquisitions.
Meanwhile, in the first half of 2019, BBTN booked assets of Rp312.47 trillion, growing 16.58 percent from the same period last year which reached Rp268.04 trillion.
Napitupulu said the increase of the company’s assets was contributed by a positive movement in financing and collecting deposits. BBTN recorded loan growth by 18.78 percent from Rp211.35 trillion in June 2018 to Rp251.04 trillion in June 2019. While the deposits per June 2019 are Rp219.75 trillion, up 15.89 percent in annual basis.
On June the bank has announced to issue Rp3.14 trillion local bond for loan expansion and other needs. The bond 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 exploring 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).
On April 22, the lender announced has bought 30 percent or 33,000 shares of 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.
Maryono stated that with the presence of the new subsidiary, the company would be freer 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 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. Meanwhile, in BBTN’ 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 Indonesia. The lender also planned to secure synthetic homeownership 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 a 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, the bank report managed assets worth of Rp308.47 trillion, or up 18.02 percent compared to the 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 the previous year, while the third party funds rose 19.09 percent from Rp 177.56 trillion to Rp 211.46 trillion from 2017. By this achievement, in 2018, the bank has managed to reap a net profit of Rp3.2 trillion, grew 5.92 percent in annual basis.
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