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Banks eyeing the money in capital market
Indonesian banks plan to generate at least Rp 49
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Indonesian banks plan to generate at least Rp 49.3 trillion (US$3.85 billion) from the capital market to finance credit expansion this year, according to the Financial Services Authority (OJK).
OJK deputy commissioner for banking supervision Irwan Lubis said the regulator welcomed the bond issuance plans as the move would help provide funding options for lenders.
'Some banks have outlined their plans. Their securities issuance may be in the form of bonds, medium-term notes or convertible bonds,' he told reporters during a press briefing on Thursday.
The OJK data ' compiled from the banks' 2015 business plans ' reveals that state lender Bank Tabu-
ngan Negara (BTN) tops the list as it plans to seek Rp 11.9 trillion from bond issuances.
BTN has regularly sold debt papers, including in the form of mortgage-backed securities, to help finance its loans that are mostly channeled to the home-loan segment.
Bank Internasional Indonesia (BII) comes second with Rp 8.4 trillion in the targeted bond issuances, while CIMB Niaga is next with Rp 6.9 trillion.
BII finance director Thilagavathy Nadason previously said the private lender had to analyze the market situation first before entering the market to source the funds.
'If the [coupon] rate is attractive, we will enter the market, but it will depend on other things as well,' she said.
CIMB Niaga finance director Wan Razly Abdullah said the bank planned on using the proceeds from the bonds issuance to support loan growth as it targeted loan growth at slightly below 16 percent for 2015.
According to outgoing president director Arwin Rasyid, the issuance could help the bank solve the tight liquidity situation and push its loan-to-deposit ratio (LDR) to between 89 and 90 percent from the 95.6 percent recorded in December.
Private lenders OCBC NISP and Panin Bank are listed next in the bond issuer list, with Rp 5.4 trillion and Rp 4.9 trillion, respectively.
Besides rupiah-denominated bonds, the data also lays out plans for foreign exchange-denominated bond issuance by state lenders Bank Negara Indonesia (BNI) and Bank Rakyat Indonesia (BRI).
According to the data, BNI hopes to book an equivalent of Rp 6 trillion and BRI expects to generate an equivalent of Rp 5.8 trillion.
Fellow state lender Bank Mandiri has also expressed its intention to sell debt papers, with targeted funds ranging from $800 million to $1 billion.
Meanwhile, during the press briefing, Irwan also reported that the banking industry now sought to book 16.43 percent yearly loan growth in 2015.
The target is slightly higher than last year's achievement of 11.89 percent.
In third-party funds or total deposits, the growth target is set at 14.4 percent this year, up from 13.79 percent in 2014.
'Most banks say they plan on collecting more retail deposits than corporate ones, aiming for higher CASA [current account, savings account],' Irwan said.
BUKU I lenders ' whose core capital stands at below Rp 1 trillion ' are recorded as banks with the highest growth targets, both in lending and funding.
