OCBC NISP looks to raise at least Rp 1t from market

PT Bank OCBC NISP Tbk, one of Indonesia’s 15 top lenders, plans to collect more than Rp 1 trillion (US$113 million) from bonds or rights issues in the first half of this year to boost lending by 25 to 30 percent.

OCBC NISP saw its net profits soar by 80 percent to Rp 753 billion in 2011 thanks to a 31 percent increase in lending, president director Parwati Surjaudaja said on Wednesday.

Net profits might grow 15 to 20 percent to up to Rp 903.6 billion this year on credit expansion, which could reduce OCBC NISP’s capital adequacy ratio (CAR) to 12.5 percent by the end of this year from 13.8 percent last year, approaching the bank’s comfortable CAR position of 12 percent.

“We have opened the door for subordinated debt [subdebt] issuance or a rights issue to strengthen capitalization according to market conditions,” Parwati told a news conference, adding the corporate action might be done in the first half this year.

Last December, Fitch Ratings lifted OCBC NISP’s long-term credit rating by two notches to BBB investment grade level, indicating decreasing investment risks in the lender’s debt papers.

Indonesia’s sovereign debt rating was also upgraded to investment status recently by Fitch and Moody’s Investors Service in a move that could boost investors’ confidence in investing in the country, potentially bringing down borrowing costs across the board to encourage firms to expand.

OCBC NISP wanted to focus its credit expansion agriculture, mining, oil and gas, consumption and transportation sectors, given the potential of the archipelago, Parwati said.

Bad loans remained manageable at 1.3 percent last year, down from 2 percent in the prior year, well below banking regulator Bank Indonesia’s (BI) 5 percent requirement.

The Net interest margin (NIM) dropped to 4.8 percent from 5 percent in 2010, but net interest income rose 13 percent to Rp 2.26 trillion last year. As of the end of 2011, OCBC NISP’s total assets reached Rp 59.8 trillion assets, up 13 percent from a year earlier.

Shares of OCBC NISP traded at Rp 1,200 apiece on Wednesday, unchanged from the prior day. With market capitalization of Rp 8.5 trillion, OCBC NISP has seen its stock prices gain 11.1 percent so far this year.

—JP/Esther Samboh