PT Clipan Finance Indonesia, one of Panin’s financing firms, which primarily focused on used cars in the past, now aims to widen its scope of financing to new cars. The company sees a huge untapped financing market in new cars, expecting a continuous demand hike.

In 2015, the sales of new cars plummeted by 16.1 percent, but then bounced back last year with a 4.9 percent increase. Car sales in Indonesia could reach 1.1 million units in 2017, according to a recent forecast by the Association of Indonesian Automotive Industries’ (Gaikindo).

“Our capital structure is strong enough as we are supported by our main shareholder, Bank Panin. We are also competitive in terms of cost of funds as we are able to provide competitive interest rates for new cars,” Clipan Finance director Engelbert Rorong said after the firm’s shareholders meeting on Monday.

The company’s credit portfolio mostly consisted of consumer financing for used cars, which accounted for more than 50 percent, followed by multipurpose loans and factoring at about 20 percent each.

“We aim to book Rp 2 trillion [US$150.3 million] from new-car financing this year,” he said. Clipan’s net profits rose by 18.8 percent to Rp 59.47 billion in the first three months of this year.

Meanwhile, Panin’s other subsidiary engaging in multi finance, PT Verena Multi Finance, prefers to focus on its core business in financing used cars and properties, including government-backed mortgages (FLPP).

Currently, used cars contribute 80 percent to the firm’s business and the remainder comes from FLPP. With such a strategy, the company posted a 167 percent increase in net profits to Rp 6.47 billion last year, after disbursing Rp 1.38 trillion in loans, or a 0.76 percent increase compared to that in 2015.

In the sharia banking business, private lender PT Panin Dubai Syariah, in which Panin Bank and Dubai Islamic Bank are the majority shareholders, aims to disburse Rp 8 trillion in loans this year and revamp its technology to develop the retail segment.

The bank will continue to develop information and technology (IT) systems to increase the retail sector’s contribution to its total financing, which stood at 40 percent as of last year, Panin Dubai president director Doddy Permadi Syarief said.

The lender channeled Rp 6.2 trillion in financing last year, which was 11.44 percent higher than the same period a year earlier.

Meanwhile, amid the tight competition in conventional banking, Panin Bank as the parent company projected a range of 6 to 8 percent loan growth this year. “The loan disbursement was still flat in the first quarter,” Panin Bank president director Herwidayatmo said.

Panin Bank booked Rp 760 billion in net profits in the first three months of 2017, a 26.9 percent year-on-year (yoy) increase, on the back of growing net interest income by 4.2 percent to Rp 2.08 trillion, as well as a 69.3 percent upsurge in fee-based income to Rp 553 billion.

As of 2016, the bank’s ownership of the three financial institutions stood at PT Clipan Finance Indonesia, 51.49 percent, PT Verena Multi Finance, 42.87 percent, and PT Bank Panin Dubai Syariah, 51.61 percent. It also had a stake in an associate entity, PT Panin Sekuritas, of up to 29 percent.

In addition, it also held minor share ownerships in several other financial companies such as PT Asuransi Multi Artha Guna, brokerage house PT First Asia Capital, PT Sarana Bersama Pembiayaan Indonesia, PT Sarana Kal-Sel Ventura, and PT Bank ANZ Indonesia.

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