Jakarta Globe, Netty Ismail, February 07, 2010
PT Bank Tabungan Pensiunan Nasional said on Friday that lending rose more than 50 percent last year, about five times the industry average, as it gained access to the country’s “mass market.”
Loan growth in 2010 “will still be strong” and continue to outpace the domestic banking industry, where lending rose about 10 percent last year, BTPN chief executive Jerry Ng said.
Deposits rose more than 60 percent in 2009 from the previous year, he said.
Fourth-quarter earnings were “strong,” Ng said, without providing a figure. The bank had net income of Rp 266 billion ($28.5 million) in the first nine months of last year.
Controlled by Texas Pacific Group, BTPN’s shares rose fivefold in the past 12 months to close at an all-time high of Rp 5,550 on Thursday. On Friday, they closed down 3.6 percent at Rp 5,350.
The bank’s growth “could outpace the sector significantly,” boosted by its micro-lending expansion, Mulya Chandra, an analyst at CIMB-GK Securities, said in a research note dated Dec. 17.
“The potential is big and quite immune from volatility, or what happens in the global economy,” Ng said. “Given that the penetration is low, the opportunity is very interesting.”
BTPN’s gross rate of non-performing loans stood at 0.5 percent in 2009, as the bank maintains a “very healthy asset quality,” Ng said.
BTPN plans to sell rupiah-denominated bonds this year to expand the microfinance business it started at the end of 2008, after TPG and its Indonesian affiliate had bought a 71.6 percent stake in the bank.
At the end of last year, the bank had 539 micro-banking branches across the country, providing loans averaging about $3,000 each to more than 100,000 customers, including food hawkers and street traders.
BTPN was founded in 1959 to provide loans and deposit services to retired civil servants.
About 85 percent of its business went to retirees last year, and 15 percent comprised microcredit. The portion coming from its microcredit business is set to grow to 25 percent at the end of this year and 40 percent in three years, Ng said.
Research estimates show that there are potentially more than 40 million self-employed Indonesians in the “mass market” segment, of which less than 30 percent have access to “formal forms of financing,” Ng said.
Because of the less competitive environment, micro loans offer the highest margin compared with other loans, Henry Pranoto, an analyst at PT Andalan Artha Advisindo Sekuritas, said in a January report.
“Micro loans will be the greatest loan-growth engine” in 2010, he said in the report.
BTPN, which plans to add 30 to 40 more micro-banking branches this year, is expanding into providing pawnshop services that comply with Islamic law, or Shariah, he said.
“The potential is quite sizeable,” Ng said. “It is very consistent with our mass market.”
Bloomberg
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