Pay day: Bank Tabungan Negara (BTN) commissioner Siswandi (left) and president commissioner Zaki Baridwan (second left) gather with president director Iqbal Latanro (center), deputy president director Evi Firmansyah (third right), director Saut Pardede (second right) and director Irman A Zahiruddin prior to a general shareholders’ meeting (RUPS) on Thursday. The meeting agreed to pay Rp 223.7 billion (US$24.4 million), or 20 percent of the bank’s net profits, as dividends. Antara/HO-mes Indonesia’s No. 10 lender PT Bank Tabungan Negara (BTN) is set to collect at least Rp 4 trillion (US$436 million) from the offering of bonds and rights shares later this year, the state bank’s executive said.

BTN, which allocates 90 percent of its loans for housing, would offer Rp 2 trillion in debt papers next month, with underwriters comprising PT Danareksa Sekuritas, PT CIMB Niaga Securities 

Indonesia and PT Indo Premier Securities, BTN finance and treasury director Saut Pardede said on Thursday.

Meanwhile, the rights issue, which will be carried out in the second semester, will be about 10 to 11.9 percent of BTN’s enlarged capital. The new shares would be offered at a price range between Rp 1,600 and Rp 2,200 each, he added. That will enable the lender to raise at least Rp 2.1 trillion from the offering, according to Saut.

BTN shares traded at Rp 1,240 apiece on Thursday’s close, after hovering around Rp 1,000 to Rp 1,820 in the past year.

“The bank is expected to be healthier with larger capital,” BTN president director Iqbal Latanro said, adding that the lender’s shareholders had also approved of a lower dividend ratio payout, down to 20 percent from more than 30 percent of net profit last year.

Therefore, Rp 223.7 billion of BTN’s Rp 1.1 trillion net profit in 2011 would be distributed to shareholders, comprised of the government (71.9 percent) and the public (28.1 percent). Shareholders will get Rp 25.3 for each share they own.

“The lower dividend proportion is aimed at adding to the banks’ capacity in expanding loans,” Iqbal said. BTN has targeted its lending to grow 20 to 25 percent this year, while maintaining its focus on mid- to lower-class housing, which dominated 90 percent of its housing loans.

BTN will retain 76.5 percent of its 2011 net profit, or about Rp 856 billion, to boost capitalization. The bank’s capital adequacy ratio (CAR), which measures capital strength, stood at 15.03 percent at the end of last year, and will be lifted to above 20 percent after retaining profits and issuing rights shares.

“We will maintain our CAR at a convenient level at between 13.5 and 14 percent,” Saut said.

Many banks are piling up capital to strengthen their capability to extend loans, as demand for credit is booming in an economy reliant on domestic consumption. 

Indonesia, the biggest economy in Southeast Asia, saw economic growth reach its highest level in 15 years last year with lending growing by 24 percent.

PT Bank Internasional Indonesia Tbk (BII), owned by Malaysia’s largest lender Malayan Banking Berhad (Maybank), on Thursday also secured its shareholders approval not to payout dividends and instead retain the entirety of the bank’s Rp 669 billion net profit from last year.

BII’s managing director for finance, Thila Nadason, said the decision was made to lift the bank’s CAR position as it has neared the lower-end of its convenient CAR level of between 12 and 13 percent.

BII wants to grow lending by 20 to 25 percent this year, in line with the overall banking industry.

Shares in BII traded at Rp 470 apiece on Thursday, up 1.08 percent from a day earlier.

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