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Jakarta Post

Major lenders set lower rates to boost mortgages

Large banks are offering lower mortgage rates in a bid to boost consumer and overall loans amid the lending rate decline

Grace D. Amianti (The Jakarta Post)
Jakarta
Sat, February 6, 2016

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Major lenders set lower rates to boost mortgages

L

arge banks are offering lower mortgage rates in a bid to boost consumer and overall loans amid the lending rate decline.

The large lenders, which have significant mortgage portfolios, are offering rate cuts across several sectors following Bank Indonesia'€™s (BI) decision to slash its benchmark rate by 25 basis points (bps) to 7.25 percent in January.

Bank Negara Indonesia (BNI) consumer banking director Anggoro Eko Cahyo said the lender would offer a fixed five-year lending rate for mortgages until June 30.

The offer, published on the bank'€™s website, comprises a gradual increase in fixed lending rates, 8.7 percent annual for the first two years and 10.7 percent annual for the following three years.

'€œThis offer is certainly aimed at attracting prospective mortgage customers to choose BNI among other banks,'€ Anggoro said Friday, adding that the bank was aiming to see growth of 10 to 12 percent for mortgages and 16 percent in overall consumer loans.

BNI booked Rp 34.6 trillion in mortgages by the end of 2015, a slight increase of 4 percent from Rp 33.3 trillion a year earlier due to weak consumption.

Mortgages contributed 60.2 percent to BNI'€™s total consumer portfolio and 10.6 percent to the bank'€™s overall loans of Rp 326.1 trillion as of Dec. 31.

According to BI data, property loans as of Dec. 2015 grew 11.8 percent year-on-year (yoy) to Rp 620.4 trillion, from 11.5 percent yoy in November last year, mainly boosted by construction loans and mortgages.

Bank Mandiri corporate secretary Rohan Hafas said the state-owned lender was offering a deal from
Feb. 1 to March 31, including fixed mortgage rates of 9.25 percent and 9.75 percent for three and five years, respectively.

'€œAside of celebrating the Chinese Lunar New Year, the offer is also intended to push our penetration in the retail segment, especially in mortgages,'€ he said in a statement, adding that the offer could be applied for first and second homes nationwide.

Rohan said the bank expected the promotional offer to help it achieve its mortgage growth target of around 5 to 6 percent this year, which was higher than its Rp 30.6 trillion in mortgages booked last year, an increase of 2.1 percent yoy.

Bank Tabungan Negara (BTN), the country'€™s largest mortgage lender with 30.6 percent market share, will also offer a lower mortgage rate of 6.6 percent during a property expo it is set to hold on Feb. 13.

BTN president director Maryono said the bank lowered its lending rate for new mortgage applications to 9.6 percent, starting on Feb. 1, adding that '€œwe are optimistic about maintaining our loan growth at around 18 to 20 percent this year'€.

Private lenders Bank Central Asia (BCA) and CIMB Niaga, also the country'€™s largest mortgage players, joined the competition to offer lower lending rates.

BCA consumer banking director Henry Koenaifi said the lender was currently offering a rate discount of 0.5 percent for its mortgage customers who had funds worth three times the monthly installments in their saving accounts.

Meanwhile, CIMB Niaga is offering a fixed rate at 9.28 percent for five years until March 31, with a down payment starting at 10 percent, as well as free provision and administration fees.

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