P

ublicly listed bank OCBC NISP, part of Singaporean lender OCBC Bank, will review its plan to issue Rp 3 trillion (US$235.85 million) worth of bonds in 2015 due to recent volatility in the financial market, its top executive has said.

OCBC NISP president director Parwati Surjaudaja said the lender had included the bond-issuance plan in its 2015 banking business plan, which it submitted to the Financial Services Authority (OJK) in November.

The debt-paper sale is part of the lender'€™s continuous bond-offering plan, worth Rp 6 trillion, that will be due in the first quarter of 2015. It had already sold Rp 3 trillion worth of bonds back in 2013.

'€œWe were still optimistic about the next debt-paper sale two weeks ago. However, recent developments have forced us to reevaluate the plan '€” whether or not it will be feasible for us to proceed,'€ she told reporters in a discussion on Wednesday.

The domestic financial market, along with those in other emerging economies, suffered from severe volatility in the past few days, in anticipation of the US Federal Reserve'€™s policy announcement and outlook for interest rates.

At the same time, Russia'€™s measures to support its currency had also triggered panic among emerging-market investors, resulting in a decline in many Asian currencies, including the rupiah.

'€œWe want to analyze the situation first. Hopefully things will improve in January,'€ Parwati said, adding that funds generated from the bonds issuance would be used to finance credit expansion in 2015 and would help reduce its loan-to-deposit ratio (LDR).

OCBC NISP, now the 11th largest bank by assets in Indonesia, aims at posting at least 15 percent credit growth next year, in line with what has been set by Bank Indonesia (BI).

OCBC NISP finance director Hartati said the lender'€™s current LDR might be pushed down by around four percentage points to 86 percent, supported by proceeds of the debt-paper sale.

As reported before, BI said that it would allow securities issued by banks to be included as one of the components of deposits. The move is seen as an effort to broaden the banks'€™ funding sources, currently suffering from a tight environment.

'€œHowever, we already have several loan facilities that we may use to support our credit expansion if we eventually have to scrap the bonds-issuance plan,'€ Hartati said.

Part of the facilities is a $300 million standby facility provided by parent company OCBC Bank.

Parwati said the lender would also be cautious about several business sectors in 2015 as they were still affected by ongoing economic slowdown. '€œWe will pay more attention to the commodities and mining sectors and their supporting businesses,'€ she said.

According to data from the bank, agriculture and mining made up for 7 percent, or Rp 4.66 trillion, of its total lending during the first nine months of this year.

Meanwhile, OCBC NISP plans to allocate around Rp 300 billion of funds to support next year'€™s operations, including for its IT system improvement.

The bank'€™s shares are listed on the Indonesia Stock Exchange (IDX) under the '€œNISP'€ code. The shares'€™ price surged 3.1 percent to Rp 1,340 apiece on Wednesday from the previous day.