P

ublicly listed lenders PT Bank Danamon and PT Bank Tabungan Negara (BTN) are reporting huge business growth, despite new loan-to-value (LTV) regulations affecting vehicle and housing credits.

Danamon booked Rp 2.99 trillion (US$311 million) in consolidated net profits in the first nine months of the year, up 22 percent from Rp 2.45 trillion in the same period last year, while BTN reported that its net profits increased 45 percent to Rp 1.02 trillion, up from Rp 704 billion.

“The increase in net profits was supported by growth in lending in all segments,” Danamon president director Henry Ho said on Wednesday.

Danamon’s lending rose 16 percent to Rp 113.27 trillion as of the end of September, compared to Rp 97.43 trillion in the same period last year.

Danamon chief financial officer Vera Eve Lim said that Danamon’s lending was dominated by mass market credits, comprising loans to the self-employed, automotive loans, durable goods loans and sharia gold pawn lending.

Credits to the mass market segment rose 14 percent to Rp 64 trillion, accounting for 57 percent of Danamon’s total credit issued.

“We actually started to experience the impact of the regulations on minimum down payments, particularly for loans for motorcycles, which is run by our subsidiary PT Adira Finance. However, we have seen that credit in other segments has increased,” Vera said.

She said that Adira’s lending for vehicles rose 15 percent to Rp 45 trillion as of the end of the third quarter, compared to the same period last year.

The company reported that its motorcycle lending rose only 5 percent, beating the average for the motorcycle industry, which has seen total sales slump by 13.9 percent due to the implementation of minimum down payment regulations in July.

Bank Indonesia implemented regulations that increased the minimum amount of down payments that customers had to pay to banks or other financing firms to avoid overheating in several rapidly growing credit sectors, including vehicle and mortgage loans.

The central bank’s regulation said that commercial banks could issue individual housing and automotive loans to cover a maximum of 70 percent of the item’s total value, while it set the limit for motorcycle loans at 75 percent. Previously, the LTV ratio for all lending stood at 80 percent.

BTN, whose housing loans contributed 86 percent to its total loans, said that implementation of the regulations did not affect the lender’s growth in housing loans.

The state-owned lender reported that its total credit issued rose 29 percent to Rp 76.57 trillion as of the end of the third quarter, up from Rp 59.31 trillion in the same period last year.

The bank also said that its housing loans would continue to grow following a Constitutional Court ruling that permitted lenders to disburse credits for housing with an area of less than 36 square meters.

— JP/Raras Cahyafitri