The country’s largest mortgage lender expects to raise a total of Rp 18 trillion (US$1.31 billion) in funds from sources outside traditional third-party funding, namely securitization, bilateral and convertible loans and the issuance of negotiable certificates of deposit (NCD).

The total amount targeted this year was slightly higher than the Rp 17 trillion in alternative funding it managed to raise in 2017, said Iman Nugroho Soeko, BTN’s finance and treasury director.

He said the nearest fund-raising action would be securitization, also known as asset-backed securities issuance, from the which the bank targeted to raise up to Rp 2 trillion.

“We hope the process will be completed by the end of this month,” he said during a press conference on Tuesday, adding that the funds were expected to be received by early March.

Iman said the bank planed to raise Rp 2 trillion from convertible bonds this year as those types of securities would help maintain its capital adequacy ratio (CAR) at around 18 percent.

Before seeking out alternative funds, he said the bank would assess its capital needs and calculate which among the schemes was most cost-efficient.

BTN aims to grow its loans by 24 percent in 2018, higher than the 18 to 19 percent targeted last year as it pinned its hopes on a brighter outlook for financing house construction.

The 2018 figure is double the 12 percent growth target for the banking industry this year set by the Financial Services Authority following sluggish lending disbursement throughout 2017.

In 2017, BTN booked 21.01 percent loan growth year-on-year (yoy) to Rp 198.9 trillion, with the majority, 90 percent, of its total portfolio going to the housing sector.

Loans to the housing sector grew by 21.1 percent last year, supported by a 23.2 percent increase in mortgages.

BTN president director Maryono said the bank expected to disburse mortgages for up to 750,000 houses in 2018 to support the government’s One Million Houses program, which comprised of subsidized and non-subsidized loans given for 536,868 houses and 213,132 houses, respectively.

Meanwhile, non-housing loans, which include consumer and commercial credits, grew by 19.78 percent in 2017 to Rp 19.76 trillion.

Despite its double-digit loan growth last year, BTN has managed to keep its bad credit proportion low as its gross non-performing loan (NPL) rate declined to 2.66 percent from 2.84 percent seen in 2016. Its net NPL was also down to 1.66 percent from 1.85 percent, over the same period.

BTN director Nixon Napitupulu credited the improvement in the NPL rate to a loan restructuring program for several commercial housing lending schemes, particularly the high-rise building segment.

“We actively offered loan restructuring [programs to customers],” he said.

The bank posted a 15.5 percent yoy net profit growth to Rp 3.02 trillion in 2017, supported by an increase in net interest income as well as operational profit.

Net interest income rose 14.4 percent to Rp 9.44 trillion last year, while operational profit, which includes fee-based income, increasing by 16.1 percent to Rp 3.89 trillion over the same period.

Maryono said the bank was aiming to achieve 25 percent growth in net profit this year, while also seeking to maintain its gross NPL rate at between 2.3 to 2.5 percent.

Meanwhile, its third-party funds stood at Rp 192.95 trillion last year, an increase of 20.4 percent yoy.

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