Jakarta, 26 July 2016 – Focused and consistent in serving lower-income communities, as well as micro, small and medium enterprises (MSMEs), including productive poor communities (mass market), PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) continues to reinforce its role in empowering people from these segments.
This is shown from the bank’s loan portfolio for the first semester of 2016. As of the end of June 2016, BTPN has disbursed loans of Rp 61.6 trillion, up 11% (year on year/yoy) from the same period last year of Rp 55.7 trillion. Its loan performance is above the average loan growth of the banking industry and remains within the target range expected by the regulator.
“Many people have been worried that lending would suffer as a result of the slowdown in the people purchasing power. However we are grateful that BTPN has enjoyed 11% growth in loans,” said President Director of BTPN Jerry Ng on Tuesday (26/7).
The credit growth has been driven by an increase in the MSME and productive poor communities loan segment. As of the end of June 2016, MSME loans, including lending for productive poor communities through BTPN Syariah, has risen by 16% to Rp 20.8 trillion, compared to the same period last year of Rp 18 trillion. Meanwhile, loans to other segments also go up, by 9% to Rp 39.3 trillion.
The increase in the loans disbursed by the bank is always followed by the prudent banking principles, as reflected by the non-performing loan (NPL) ratio of 0.7% (gross), the lowest in the Indonesian banking industry currently. “Loan growth of 11%, with a non-performing loan ratio maintained at 0.7%, demonstrates that we remain committed to expandi with prudent principles,” Jerry added.
BTPN’s impressively low NPL ratio is a result of the bank’s effort to provide its customers with mentoring and empowerment through Daya Program. BTPN believes that the mass market customers not only require loans quickly and conveniently, but also need continual assistance. From January to June 2016, BTPN has organized 110,581 Daya empowerment training events which were attended by 791,065 customers.
In order to optimize its intermediary role improve efficiency, BTPN consistently balances its liquidity adequacy and loan growth rate. As of 30 June 2016, total funding stands at Rp 69.6 trillion, up 7%. Of this figure, third party funds contributes Rp 65.3 trillion, 14% higher than the same period last year of Rp 57.1 trillion. Meanwhile, the value of bilateral loans and bonds are amounted to Rp 4.2 trillion.
“Several of these bilateral loans and bonds reached maturity.Hence the portion of non-third party funding is decreased. Nevertheless, we are successful in keeping our loan to deposit ratio (LDR) at the level of 94%. If we take loans to other parties and equity into account, our loan to deposit ratio stands at a very robust and healthy 73%,” Jerry added.
BTPN’s efforts to balance liquidity adequacy with the loan growth rate indirectly impacts the cost of funds. By the end of the first semester of 2016, BTPN's interest expenses has shrunk by 4% (yoy) to Rp 2.5 trillion. Meanwhile, the bank's interest income has grown stably in the range of 7% (yoy). The combination of expansion in new loans and greater efficiency of the cost of funds drives operating income up by 12% (yoy) to Rp 4.6 trillion.
Currently BTPN has BTPN Wow! to serve the mass market segment and communities with no previous access to banking services. BTPN Wow! is a BTPN brand for the branchless banking program (Layanan Keuangan Tanpa Kantor dalam Rangka Keuangan Inklusif, or Laku Pandai) initiated by the Indonesian Financial Services Authority (OJK). It is an extremely practical and affordable banking service which utilizes mobile phone technology and is supported by a network of agents that act as an extension of the bank.
Since its launch in March 2015 until June 2016, BTPN Wow! has more than 35,000 agents and 700,000 customers. “These figures show the high interest from disadvantaged communities to technology-based banking services. In the near future we will expand further into the digital world in order to meet customer’s needs that are more complex in broader segments.,” Jerry continued.
To develop BTPN Wow! and digital services infrastructure, BTPN continues to expand its scale of investment. In the first six months of this year, the bank has allocated Rp 195 billion for this purpose, a massive leap of 359% from the same period last year. In fact, this investment sum has far outstripped the figure for the whole of 2015 of Rp 184 billion. “Of course this caused our operating costs to go up, but we are confident that this investment will have a significantly positive effect on our business in the future,” Jerry enthused.
The synergized combination of all BTPN’s strategies and approaches means the bank enjoyed a 9% rise in the value of its assets (yoy), from Rp 79.5 trillion to Rp 86.7 trillion. BTPN’s capital adequacy ratio (CAR) is held at the 24% level, while the net profit before tax (NPBT) reaches Rp 1.3 trillion, up 2% (yoy). “Actually, if we were to disregard all the new investment we have made, our true profit would have shown even stronger growth. With this in mind, we are wholly optimistic that BTPN’s performance in the years ahead will go from strength to strength,” Jerry concluded.