Jakarta, 23 October 2014 – The dynamics of Indonesia’s macro-economy by the end of September 2014 still encountered various challenges. The growth of the economy slowed, the current account deficit remained wide, and liquidity was fairly tight, all of which affected developments in the business world, including the banking sector. Amidst such conditions of slowing economic growth, it is by no means an easy challenge for a bank to carry out its role as a financial intermediary.
“In addressing the challenges posed to us, we have chosen to focus on performing our fundamental affairs in a conservative and prudent manner, including by raising liquidity reserves, maintaining good credit quality, as well as carefully managing both interest costs and operating costs,” said Jerry Ng, President Director BTPN.
By utilizing such a strategy, the performance of BTPN remained healthy. This is reflected by BTPN’s credit disbursement by the end of the third quarter of 2014 which saw moderate growth, with the non-performing loan (NPL) ratio kept low. As of 30 September 2014, BTPN had recorded annual credit growth of 13% (year-on-year/yoy) from Rp 45.3 trillion as of 30 September 2013 to Rp 51.1 trillion, with the gross NPL ratio kept at 0,8%.
In line with the measures undertaken by the company to be more cautious in terms of credit disbursement, BTPN also sought to balance its funding portion by paying attention to liquidity adequacy. As of 30 September 2014, BTPN’s Third Party Funds (TPF) stood at Rp 52.6 trillion, up 7% from Rp 49 trillion at the same stage last year.
“The loan to deposit ratio (LDR) did indeed reach 97%. However, if funding from bonds and bilateral loans is taken into account, our liquidity ratio was at the 87% level, which is considered a strong and healthy position,” Jerry continued.
The relatively moderate growth in terms of credit and TPF encouraged an 8% increase (yoy) in BTPN’s assets, from Rp 66.2 trillion to Rp 71.7 trillion as of 30 September 2014, with a capital adequacy ratio (CAR) of 23.6%, one of the highest CARs in the Indonesian banking sector. In the meantime, net profit after tax (NPAT) in this year’s third quarter reached Rp 1.42 trillion, 15% lower than that achieved in the third quarter of 2013.
“We are grateful that amidst the dynamic economic situation, BTPN has still managed to grow and post healthy financial ratios. Going into the future, it is expected that macro-economic conditions will remain challenging. Nevertheless, we are optimistic that with our unique business strategy and model, BTPN will continue to grow even further. This is especially so due to the full support we are receiving from the Sumitomo Mitsui Banking Corporation (SMBC) and TPG as BTPN’s controlling shareholders,” Jerry explained.
On 14 March 2014, SMBC completed the process of purchasing BTPN shares. This means that BTPN now has two credible and trustworthy shareholders, namely SMBC (40%) and TPG Nusantara S.a.r.l (25.88%).
BTPN has a unique business model that to date has focused its efforts on serving and empowering lower income segments of society as well as micro, small and medium enterprise entrepreneurs, including productive poor communities. BTPN’s corporate strategy, of integrating its business and social missions by continually providing ongoing training and guidance to borrowers through its Daya program, is sure to sustain the performance of the company.
From January to September 2014, BTPN organized 100,520 Daya activities, an increase of 69% compared to the same period last year. Meanwhile, the number of participating customers, or beneficiaries, in Daya reached 1,303,301, up 23.3% from the same period last year. This data demonstrates the strong desire of customers to grow together with BTPN.
“BTPN believes that customers from the segments on which BTPN focuses not only require financial access, but also training and mentorship to help them increase their business capacities,” Jerry concluded.