BTPN Posts 28% First-Half Profit Rise

Bank Tabungan Pensiunan Nasional, an Indonesian lender known for its services to retired civil servants, recorded 28 percent profit growth in the first semester of this year driven by strong loan demand from consumers and corporations in Southeast Asia’s largest economy.

The Jakarta-based lender said net income rose to Rp 1.2 trillion ($118 million) for the January to June period.

The bank did not give figures for its net interest income — income from loans after deducting charges to depositors.

Total outstanding loans at BTPN rose 27 percent to Rp 43.6 trillion at the end of June from Rp 34.4 trillion a year earlier. Its lending growth surpasses that of the banking industry overall, which according to Bank Indonesia rose 21 percent in the first half from last year.

Bank Mandiri, the country’s largest bank by assets, rose 20 percent in lending while Bank Danamon reported 12 percent lending growth in the period.

Other publicly listed banks are expected to announce their first-half earnings to the Indonesia Stock Exchange (IDX) by the end of the month.

Jerry Ng, president director of BTPN, said in a statement that the lender has shifted its focus to the “mass market,” including lending to micro- and small-sized businesses.

“In line with the financial inclusion initiative, BTPN continues to focus on expanding … to meet banking demand of the mass market segment,” Jerry said, referring to the government’s policy of promoting access to financial services.

Its net non-performing loans improved to 0.39 percent in the first half from 0.43 percent a year earlier. BTPN’s third-party funds grew 19 percent to Rp 40 trillion.

BTPN’s capital adequacy ratio, a measure of health, stood at 22.7 percent, far above the 8 percent minimum required by the central bank.

“With CAR at 22.7 percent, we believe we have enough room to grow while supporting the financial inclusion initiative,” Jerry added.

Indonesia is home to 120 commercial banks, including Bank Mandiri and Bank Central Asia, despite efforts by Bank Indonesia to encourage consolidation among industry participants.

Shares of BTPN rose 1.1 percent to Rp 4,575 on the IDX on Tuesday, lagging the 1.9 percent gain in the main stock gauge. Shares of BTPN have lost 9.4 percent this year.

BTPN is an acquisition target of Sumitomo Mitsui Banking Corporation.

The Japanese bank is seeking to buy a 40 percent stake in BTPN for up to $1.5 billion, which would make the transaction Sumitomo’s biggest buyout of a foreign financial company.

Sumitomo will replace Texas Pacific Group, a US-based private equity fund, as the BTPN’s biggest shareholder.

BTPN has 19,000 employees and more than 1,000 branches.

The Japanese lender’s investment in BTPN will give it greater access to Southeast Asia’s most populous nation.

Indonesia’s $850 billion economy is forecast to grow by more than 6 percent this year after expanding 6.2 percent last year, according to government data.