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Bank Sinarmas to distribute more micro loans
Publicly listed lender PT Bank Sinarmas, of the Sinar Mas Group conglomerate, will focus on distributing loans to small- and medium-sized enterprises (SMEs) and providing more micro loans as part of its retail banking strategy this year
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ublicly listed lender PT Bank Sinarmas, of the Sinar Mas Group conglomerate, will focus on distributing loans to small- and medium-sized enterprises (SMEs) and providing more micro loans as part of its retail banking strategy this year.
Bank Sinarmas enterprise banking director, Loa Johnny Mailoa, said that the bank would channel loans to SMEs and provide about Rp 100 billion (US$8.4 million) to Rp 200 billion in micro loans by the end of 2014.
'We are focusing on SMEs due to them being generally more susceptible to the changing economic climate [and therefore generating more loans]. The bank definitely expects new customers in the coming months,' Loa said after the bank's annual shareholders meeting in Jakarta on Friday.
Loa explained that 4 percent of the bank's current loan distribution figure of Rp 11 trillion was granted to SMEs. The bank's micro loan distribution and the focus on SMEs are part of the plan to deepen the bank's business activities, which comes on the back of its opening new offices in 2013.
'Last year, we opened more than 100 new offices. The goal now is to increase the volume of business activities in those new offices,' he said.
The bank has no plans to open any additional branches in 2014.
Bank Sinarmas is targeting to reach 2 million customers by the end of the year.
Meanwhile, Bank Sinarmas president director Freenyan Liwang said that the bank would allocate between Rp 50 billion and Rp 100 billion for its capital expenditure funds this year, which will go mainly to upgrading the bank's IT infrastructure and offices, as well as expanding and improving human capital through providing additional training.
The capital expenditures will be mostly funded by the bank's rights shares offering, which will release 1.3 million stocks to the public, representing 10 percent of Bank Sinarmas' enlarged stake.
The new shares will be sold at Rp 100 per share. The bank's stock closed at Rp 281 on Friday.
The rights issue, which was approved at the bank's annual shareholders meeting, would potentially help Bank Sinarmas collect about Rp 130 billion in funds to aid its expansion plans.
According to Freenyan, Bank Sinarmas is targeting a credit growth rate of 15 percent. The bank claims that 95 percent of that target had already been achieved in the first five months of the year.
Bank Sinarmas is also targeting Rp 380 billion in net profit by the end of the year, which is a 10 percent increase from its 2013 net profit of Rp 221 billion. (dyl)
