Jakarta, 23 April 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 bolster its role in empowering communities from these segments.
This is evidenced by looking at lending throughout 2014 which saw moderate growth with a low non-performing loan (NPL) ratio. By the end of 2014, credit had grown by 13% (year-on-year/yoy) from Rp 46.1 trillion as of December 31, 2013 to Rp 52 trillion as of December 31, 2014. This growth in BTPN lending was slightly higher than credit growth in the industry as a whole, which was in the range of 12%.
“We are very grateful that we were able to continue growing in the midst of a challenging economic situation. It is particularly exciting that lending to the MSME segment managed to grow by 22% over the course of 2014. This shows that business activities in the MSME segment are coming back to life after the slowdown over more than the last year,” said Arief Harris, Director of BTPN.
In addition to financing the MSME segment, BTPN also continued lending to pensioners, and through its subsidiary BTPN Syariah also extended credit to groups of the productive poor. Lending of funds to the productive poor segment grew by 85% from Rp 1.35 trillion as of December 31, 2013 to Rp 2.5 trillion as of December 31, 2014. “This data shows just how high the need for productive financing in this segment is. We believe that, provided with mentoring on a continuous, sustainable and measured basis, our Customers will carry on making great strides in terms of growth,” Arief continued.
The rise in lending remained offset by the application of prudent banking principles as reflected by a gross non-performing Loan (NPL) ratio which was maintained at 0.7% by the end of 2014. This forms an integral part of the BTPN strategy of providing sustainable training and guidance to Customers. This training and guidance, which is incorporated into the Daya Program, aims to enhance the capacities of all BTPN Customers, ranging from pensioners to MSME entrepreneurs as well as productive poor communities.
“Disciplined customers who put their financial training into practice in managing their businesses get to experience the direct benefits of the Daya Program,” Arief added.
Over the duration of 2014, BTPN organized 143,277 Daya activities, an increase of 59% (yoy). Meanwhile, the number of participating customers in the Daya Program reached 1,770,299, a rise of 16% (yoy). 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, BTPN also sought to balance its funding portion by paying attention to liquidity adequacy. As of 31 December 2014, Third Party Funds (TPF) stood at Rp 53.3 trillion, up 2% from Rp 52.2 trillion in the same period the previous year. In the meantime, funding from bilateral loans and bonds stood at Rp 8.2 trillion, a rise of 29% from Rp 6.36 trillion in the same period the previous year. As such, in 2014 BTPN’s total funding enjoyed growth of 5% (yoy). The diversification of funding sources constitutes one of the measures taken by BTPN to alleviate the cost of funds.
“2014 was a period full of challenges for the banking industry. In response to these challenges, BTPN focused on carrying out fundamental matters in a conservative and prudent fashion, including by preserving liquidity adequacy, maintaining good credit quality, as well as carefully managing both interest costs and operating costs,” said Arief.
By balancing the collection of TPF and the disbursement of credit, BTPN recorded a loan to deposit (LDR) ratio of 97%. However, if funding from bonds and bilateral loans is taken into account, the BTPN liquidity ratio was at the 84% level. “If we include the equity component, our liquidity ratio was 71%. This ratio demonstrates that our liquidity remains very robust and healthy,” Arief added.
The relatively moderate growth on the credit front and in TPF encouraged an 8% increase (yoy) in BTPN’s assets, from Rp 69.7 trillion to Rp 75 trillion as of December 2014. With regard to the capital adequacy ratio (CAR), this stood at 23.3%, far above the ideal threshold set by regulators.
In the meantime, net profit after tax (NPAT) in 2014 reached Rp 1.85 trillion, 13% lower than that achieved in December 2013 of Rp 2.13 trillion. “The increase in benchmark interest rates since the second half of 2013 hoisted time deposit interest rates and this continued into 2014. This certainly had an effect on our cost of funds. Nevertheless, we remain optimistic that with a healthy capital performance and the support of SMBC as our majority shareholder, BTPN will record even stronger growth going into the future,” Arief concluded.