BTN forecasts 15% lending growth, lower than 2008

The Jakarta Post ,  JAKARTA   |  Fri, 02/27/2009 2:29 PM  |  Business

State-owned lender Bank Tabungan Negara (BTN), which specializes in home loans, is projecting 15 percent growth in lending this year, its president director says.

This growth estimate for 2009 is much lower than the 42 percent growth in lending booked last year.

"This year we're only projecting a 15 percent increase in our lending, which is smaller than last year's figure," Iqbal Latanro said on Thursday.

"Last year's growth was even higher than the initial target," he said.

He said that the high growth last year would result in a positive impact on the bank's interest income.

Bank Indonesia, the central bank, expects lending by the country's banking industry to increase by an average of 15.6 percent this year, far lower than last year's average growth of more than 30 percent, as banks would be more careful in extending loans given slower growth, to avoid an increase in bad loans.

Economists estimate that for the economy to grow by more than 4.5 percent in 2009, bank lending would have to grow by at least 18 percent.

BTN however, despite the downturn, is looking to improve profits by about 9 percent this year to more than Rp 470 billion.

He said last year's performance was better than the year before in terms of the ratio of nonperforming loans (NPLs) and profits.

He said that the bank's gross NPL rate last year was 3.22 percent. It also recorded a profit of Rp 432 billion in 2008, up by 7 percent on the Rp 402 billion booked in 2007.

The company's third party funds last year also increased by 22 percent to around Rp 32 trillion.

Indonesia's economy is expected to expand by 4.5 percent this year, slower than the 6.1 percent booked in 2008, Finance Minister Sri Mulyani Indrawati said recently.

Meanwhile, other state-owned banks such as Bank Mandiri and Bank Negara Indonesia (BNI) have also predicted lower growth in bank lending this year.

Mandiri, the country's largest lender by assets, has forecast that its lending this year would grow at less than 18 percent, while BNI has forecast its lending growth at 17 percent in 2009, down from the 28 percent growth booked last year. (fmb)

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