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29 July 2015
MSME CREDIT GROWS BY 32%, FINANCING OF THE PRODUCTIVE POOR SEGMENT GROWS BY 56%
Jakarta, 29 July 2015 – Focused and consistent in serving lower-income communities, as well as micro, small & medium enterprise (MSME) entrepreneurs, including productive poor communities (mass market), PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) continues to reinforce its role in empowering communities from these segments.
This is evidenced by looking at lending throughout the first semester of 2015 which saw moderate growth with a low non-performing loan (NPL) ratio. As of 30 June 2015, BTPN had recorded credit of Rp 55.7 trillion, up 11% from the figure in the same period last year of 50 trillion. Non-performing loans, meanwhile, were maintained at the 0.8% level, far below the NPL threshold set by regulators.
“Over the first semester of 2015, the economic situation was overshadowed by slowing economic growth and reduced public purchasing power. We are thankful that BTPN was able to continue growing, maintain good credit quality, and remain consistent in implementing customer empowerment programs during this challenging period,” said Jerry Ng, President Director of BTPN.
MSME credit disbursement has grown significantly and serves as an engine of growth. The credit portfolio of this segment totaled Rp 14.8 trillion by the end of June 2015, an increase of 32% (year-on-year/yoy). If calculated on a year to date (ytd) basis, or from the December 2014 position of Rp 12.7 trillion, credit in the MSME segment enjoyed a rise of 16%. “This data shows that business activities in the MSME segment are coming back to life, even though the economy is facing pressures. We are certainly happy that in the current circumstances we are still enhancing our participation in financing the MSME segment,” Jerry added.
In addition to financing the MSME segment, BTPN is providing credit to pensioners and, through its subsidiary BTPN Syariah, is also lending to groups of productive poor communities. Pension credit grew by 8% (yoy) to Rp 35.8 trillion, while lending to the productive poor segment soared by 56% (yoy), from Rp 2.1 trillion to Rp 3.2 trillion. “The expansion of credit to the productive poor segment is a truly extraordinary achievement, bearing in mind that the average loan is Rp 1.5 million per customer per year. This shows the great need for funding among lower income groups,” Jerry continued.
To enhance the capability and capacity of BTPN Syariah to serve the productive poor segment, BTPN and PT Triputra Persada Rahmat, as a shareholder, injected Rp 160 billion worth of new capital in order to upgrade the status of BTPN Syariah to Bank Umum Kelompok Usaha (BUKU) II, or a Commercial Bank Business Category II. “We have already received permission. The next step is to create new products and innovations to expand our role in this segment, for example by synergizing BTPN Wow! services for BTPN Syariah customers,” he said.
BTPN Wow! is BTPN's brand for the Layanan Keuangan Tanpa Kantor dalam Rangka Keuangan Inklusif (Laku Pandai) program, or Branchless Financial Services in the Framework of Inclusive Finance. Management believes that these services can increase people's access to the banking system. “The more people who come into the banking system and become bankable, the more opportunities open up for new financing. For BTPN Syariah, these mobile phone-based services are very strategic because most of the target market does not yet have a bank account, lives in rural areas and is far away from the reach of banking services,” Jerry said.
BTPN also consistently provides training and mentoring to its customers on an ongoing basis. This training and mentoring, which is known as the Daya Program, aims to enhance the capacity of customers including pensioners, MSME entrepreneurs, as well as productive poor communities.
During the first semester of 2015, BTPN organized 47,912 Daya activities. Meanwhile, the number of participating customers in the Daya Program reached 676,526. This data illustrates the high level of interest that customers have in taking part in empowerment programs.
In order to adjust the pace of lending growth and alleviate the cost of funds, BTPN also sought to balance its funding portion by paying attention to liquidity adequacy. As of 30 June 2015, Third Party Funds (TPF) stood at Rp 57.1 trillion, up 8% from Rp 52.7 trillion in the same period last year. In the meantime, funding from bilateral loans and bonds stood at Rp 7.68 trillion, a rise of 22% from last year’s Rp 6.28 trillion. As such, BTPN’s total funding enjoyed growth of 10% (yoy) to reach Rp 64.8 trillion.
By balancing TPF and credit, BTPN recorded a loan to deposit (LDR) ratio of 98%. However, if funding from bonds and bilateral loans is taken into account, the BTPN liquidity ratio was very strong and healthy at the 86% level. “We welcome the initiative of regulators to include bonds in the liquidity ratio calculation components. The expansion of the definition of LDR to loan to funding ratio (LFR) will make banks more confident to increase lending,” Jerry explained.
The moderate growth on the credit front and in TPF encouraged an 11% increase (yoy) in BTPN’s assets, from Rp 71.4 trillion to Rp 79.5 trillion as of 30 June 2015. As to the capital adequacy ratio (CAR), this stood at 23.6%, while net profit after tax (NPAT) in the first semester of 2015 amounted to Rp 928 billion, 7% lower than that achieved in the same period last year of Rp 996 billion.
“BTPN's performance was characterized by good growth with healthy and strong ratios. We remain optimistic that BTPN will be able to record even greater growth,” Jerry concluded.
For further information please contact:
PT Bank BTPN Tbk
Andrie Darusman – Communications & Daya Head
Email: [email protected] or [email protected]
PT Bank BTPN Tbk (Bank BTPN) is a foreign exchange bank and is a merger between PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) and PT Bank Sumitomo Mitsui Indonesia (SMBCI) in February 2019. Bank BTPN serves various segments in the banking industry, from retail to corporate customers, including retirees, micro-, small- and medium-sized enterprises (MSME) and productive, pre-prosperous communities; the consuming class segment; and the corporate segment. Bank BTPN provides the services through business units, such as BTPN Sinaya—a business unit for wealth management, BTPN Purna Bakti—a business serving retirees, BTPN Micro Business—a business unit serving micro businesses, BTPN SME—a business serving small- and medium-sized enterprises, Jenius—a digital banking platform serving the consuming class segment, and the corporate business unit, which serves national, multinational, and Japanese companies. Bank BTPN also has a subsidiary, namely PT Bank BTPN Syariah Tbk, which focuses on serving customers from the mass market. Bank BTPN also regularly provides training sessions and information for customers through the Daya Program—a sustainable and measurable empowerment program—to improve customers’ capacity so they can grow and have a chance to live better.