Together with SMBC & TPG, BTPN is in a Great Position to Extend Sustainable Growth
Jakarta, 8 May 2014 – Focused and consistent in serving and empowering lower-income segments of society, as well as micro & small enterprise entrepreneurs, including productive poor communities (mass market), PT Bank Tabungan Pensiunan Nasional Tbk (BTPN) has continued to record a positive performance.
This success forms part and parcel of the BTPN strategy of integrating its business and social missions as reflected through ’Daya’. Daya is a measured and sustainable empowerment program which focuses on health and welfare, as well as practical training for entrepreunerial skills.
“We are well aware that the mass market segment not only require financial access, but also training and guidance to enhance their capacities. To this end, BTPN provides the Daya Program which is comprised of trainings and guidance to enhance our customers capacity,” said Anika Faisal, Director of BTPN.
Daya is implemented in each of BTPN’s business units. Currently, BTPN has four business units, namely BTPN Purna Bakti which is designed for pensioners, BTPN Mitra Usaha Rakyat which is aimed at micro & small enterprise entrepreneurs, BTPN Syariah which was formed to serve the interests of productive poor communities, and BTPN Sinaya which serves as the funding business unit.
The Daya program has proven as an effective way tosupport the company’s performance. This is reflected by the results of the first quarter of 2014. In the midst of the national economic challenges, during the first quarter of 2014 BTPN recorded an increase in credit disbursement of 14% (year-on-year/yoy), from Rp 41 trillion as of 31 March 2013 to Rp 47 trillion as of 31 March 2014. This rise in credit disbursement is compensated by the implementation of prudent banking principles as reflected by a gross Non-Performing Loan (NPL) ratio of 0.7% by the end of March 2014, unchanged from gross NPL at the end of March 2013.
This achievement was align with the regulators’ expectations which had targeted a rise in credit in the range of 15% - 17% in order for a more balanced and robust growth of the economy. “The impact of economic dynamics that began in the second semester of 2013 is continuing until now. We are certainly grateful that we have managed to keep growing in a healthy manner,” said Anika.
Anika continued that the condition of the national economy is still being overshadowed by high inflation, hikes in deposit interest rates and the slow recovery process of the global economy. These circumstances are driving the banking industry to make a number of adjustments, including slowing the pace of credit.
In line with efforts to slow the pace of credit, BTPN is balancing its funding portions by paying close attention to liquidity adequacy. As of 31 March 2014, BTPN’s Third Party Funds (TPF) were recorded at Rp 49.3 trillion, a rise of 6% from the same period last year when they stood at Rp 46.6 trillion. “With this strategy, our loan to deposit ratio (LDR) has been maintained at a level of 95%. If we take into account funding from bonds, our liquidity ratio becomes very robust and healthy 84%,” said Anika.
Supported by this positive performance, BTPN’s assets have also grown accordingly. As of 31 March 2014, BTPN’s total consolidated assets were valued at Rp 67.3 trillion, a rise of 8% compared to the position of 31 March 2013, when they were valued at Rp 62.6 trillion. In addition, the capital adequacy ratio (CAR) stood at 24%, far above the ideal threshold set by regulators.
In the first quarter of 2014, BTPN recorded net profit after tax (NPAT) of Rp 493 billion. In comparison to net profit in the fourth quarter of 2013 (quarter over quarter/QoQ), this represents growth of 8%. “This comparison with results from the fourth quarter of 2013 shows that our business in the first three months of 2014 is very much back on track. This is a really positive beginning to 2014,” said Anika.
Nevertheless, in comparison to NPAT in the first quarter of 2013, which was recorded at Rp 536 billion, NPAT in the first quarter of 2014 has undergone a correction of 8%. This decline has been caused by, among other factors, a more cautious bank policy in undertaking expansions, keeping in mind that neither the global nor national economy has yet reached a point of stability. Increases in the cost of funds as well as overheads have also squeezed company profits.
The consistency BTPN has shown in serving the mass market segment has also attracted the attention of various other parties. Since 14 March 2014, BTPN has had a new controlling shareholder in the Sumitomo Mitsui Banking Corporation (SMBC). With the entrance of SMBC, BTPN now has two credible and trusted controlling shareholders, namely TPG Nusantara S.a.r.l (25.88%) and SMBC (40%).
SMBC is one of the biggest banks in Japan, and forms part of the Sumitomo Mitsui Financial Group (SMFG), one of the largest financial groups in that country. As of September 2013, SMBC had assets worth Rp 14,693 trillion.
“The presence of a bank which such firm strength and stability as SMBC will certainly enhance BTPN’s leverage in the national banking industry. Being part of a resilient, world-class financial institution will provide increasing opportunities for BTPN to continue growing in a sustainable manner,” said Anika.
Going into the future, the joining of SMBC will not affect BTPN’s business focus on serving the mass market segment. Nevertheless, Management will continue to study and assess new business opportunities that are likely to have a positive effect on the performance of BTPN.
Evidence of BTPN’s consistency in serving the mass market segment can be found in the fact that plans for the spinoff of the BTPN Syariah Business Unit (UUS) to become Bank Umum Syariah (BUS) are going ahead. In February of this year, BTPN conducted an equity participation worth Rp 600 billion in Bank Sahabat Purba Danarta. “At present, we just need to wait for permission from the Financial Services Authority Saat (OJK) to convert Bank Sahabat into a Syariah Bank which will be continued with the spinoff of the syariah unit into BUS,” said Anika.
BTPN Syariah is focused on seving the productive poor segments of society, with average loans of Rp 1 million - Rp 3 million. The choice to focus on this segment has necessitated an expansion of the office network and the opening of new fields of work. “The syariah model that we are developing is very labor intensive. At present, the BTPN Syariah Business Unit has 8,275 employees, and during the first quarter of 2014 it disbursed credit of Rp 1.6 trillion to productive poor customers, representing growth of 161% in comparison to the first quarter of 2013,” Anika concluded.