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T Bank OCBC NISP Tbk (NISP), one of Indonesia’s top 15 lenders, is looking to raise Rp 1.5 trillion (US$163.5 million) by offering rights shares to strengthen its capitalization and extend loans.

The lender, the result of a merger between the OCBC Bank Singapore and Bank NISP, will offer up to 1.51 billion shares at Rp 1,000 apiece, an 18 percent discount on their market price of Rp 1,210 at Friday’s close.

OCBC NISP president director and CEO Parwati Surjaudaja previously said the offering could be launched in the coming months.

“Funds raised from the sixth rights issue will be used to strengthen capitalization structure, so that Bank OCBC NISP could be more flexible in expanding its business,” Parwati said in a statement sent to The Jakarta Post on Friday.

OCBC NISP’s capital-adequacy ratio (CAR) is expected to reach 15 percent by the end of the year, from 13.8 percent in 2011, enough to extend more loans as part of the bank’s credit-expansion plans.

The bank’s loan-to-deposit ratio (LDR) was at 87 percent at the end of last year, meaning there’s still room to grow credit as the level was well within the central bank’s 78 to 100 percent range to indicate a healthy balance between credit and deposits at banks.

OCBC NISP wants to grow credit by between 25 and 30 percent this year to maintain last year’s 31 percent growth, Parwati has previously said, adding OCBC NISP will this year focus on lending for the agriculture, mining, oil and gas, consumption and transportation sectors

Lending expansions have made national commercial banks very profitable in recent years, with OCBC NISP booking a 80 percent increase in net profit to Rp 753 billion as net interest income — revenue derived from the lending rate charged to customers — rose 13 percent to Rp 2.26 trillion.

Strong demand for lending coming from a low interest rate from banking regulator Bank Indonesia (BI) has taken up banks’ capital. Several lenders planned to collect funds from the capital market, both in bonds and stocks, to secure financing for their credit expansions.

“On Friday, March 30, 2012, Bank OCBC NISP submitted an application statement for the sixth rights issue to the Capital Market and Financial Institution Supervisory Agency [Bapepam-LK],” the bank said.

The rights issue carries a 500 to 107 ratio, wherein every holder of 500 shares in OCBC NISP will be entitled to buy 107 rights shares at Rp 1,000 apiece. The plan is subject to shareholder approval that will be sought in a May 22 meeting.

If shareholders did not execute their rights in the offering, their ownership in OCBC NISP would be diluted, but the bank did not elaborate on this. As of March 2011, OCBC NISP is 85.1 percent owned by OCBC Bank Singapore, with “other investors” holding the rest of the stock, according to its website.

OCBC NISP did not explain why it decided to choose a rights offering instead of bond issuance like it had planned.

Last December, Fitch Ratings lifted OCBC NISP’s long-term credit rating by two notches to the BBB investment-grade level, potentially leading to lower borrowing costs as investment risks decline.

The bank has launched five rights issuances since it went public in 1994, according to its statement.

OCBC NISP had a market value exceeding Rp 8.5 trillion as close of trading Friday, when its shares remained unchanged at Rp 1,210 apiece. The shares have risen 12.04 percent the first quarter of the year, outperforming the benchmark Jakarta Composite Index’s (JCI) 7.82 percent gain.

It currently serves customers through 400 bank branches in 88 cities throughout Indonesia, with 600 automated teller machines (ATM) accessible through 37,500 ATM networks in 15 countries, including ATM Bersama, PRIMA, OCBC Bank Singapore and BankCard in Malaysia.

— JP/Esther Samboh