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State lenders set to pay out lower dividends
State lenders are expected to pay out between 10 and 30 percent of their 2014 net profits to the state, lower than the paid amount in 2013, according to a senior official with the State-Owned Enterprises Ministry
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State lenders are expected to pay out between 10 and 30 percent of their 2014 net profits to the state, lower than the paid amount in 2013, according to a senior official with the State-Owned Enterprises Ministry.
'We are aiming for [a dividend] payout ratio within a range of 10 to 30 percent for state lenders,' said ministry deputy for finance, construction and other services Gatot Trihargo.
The lower the payout ratios of state lenders, the more capital they would have to expand their credit, he said on Tuesday.
A dividend payout ratio is a percentage of the concerned firms' total net profits that must be paid out to their shareholders.
Budi Satria, the corporate secretary of publicly listed state lender Bank Rakyat Indonesia (BRI), said his firm hoped to have around a 10 to 20 percent dividend payout ratio for 2014 from 30 percent in 2013.
'With our capital adequacy ratio [CAR] hitting almost 19 percent, we believe we can grow better this year if we are granted a lower payout ratio [from last year's net profit],' he went on.
BRI recorded a 14.35 percent surge in net profits to Rp 24.2 trillion (US$1.9 billion) last year from Rp 21.16 trillion in 2013.
Another state lender, Bank Mandiri, stated previously that it expected a dividend payout ratio of around 20 percent from its net profits last year.
Other state-run lenders, Bank Negara Indonesia (BNI) and Bank Tabungan Negara (BTN), are also likely to see dividend payout cuts.
The ministry also planned to slash the dividend payout ratios of state enterprises other than those operating in banking, according to Gatot.
'However, we can't disclose the details of the proposed payout ratio of each state enterprise. We're still waiting for the companies' audited financial reports that will probably be issued later this month,' he explained.
The ministry previously conveyed that it planned to slash state enterprises' dividend payments from Rp 44 trillion to Rp 34.95 trillion, from the firms' total net profits in 2014, with Rp 17.6 trillion coming from 17 publicly listed state companies.
According to ministry data, the 17 enterprises are set for payout ratios of between 10 and 50 percent.
State-run telecommunications giant PT Telekomunikasi Indonesia (Telkom) paid 65 percent of its total net profits in 2013 as dividends.
PT Wijaya Karya (Wika) corporate secretary Suradi said the state-run construction firm expected the government would slash its dividend payout ratio to around 10 to 20 percent.
'The remaining profits can be channeled to support our infrastructure projects, such as electricity and toll roads,' he told The Jakarta Post.
