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Jakarta Post

Private lenders Panin Bank, Standard Chartered expect solid loan growth

  • Winny Tang

    The Jakarta Post

Jakarta   /   Thu, March 14, 2019   /   11:54 pm
Private lenders Panin Bank, Standard Chartered expect solid loan growth Private lenders Panin Bank and Standard Chartered Bank Indonesia are projecting moderate loan growth this year. (Shutterstock/Anton Violin)

Two major private lenders, Panin Bank and Standard Chartered Bank Indonesia, expect solid growth in the loan business this year.

Publicly-listed Panin Bank sees growth in its loan segment at 8 percent to 9 percent, driven by the commercial segment.

“We are just being realistic, because investors tend to take a wait-and-see approach during political years,” said president director Herwidayatmo in Jakarta recently, referring to the upcoming elections on April 17.

Panin Bank’s loan growth target for 2019 is similar to last year’s realization. The lender’s outstanding loans reached Rp 151.6 trillion (US$10.61 billion) in 2018, up 8.06 percent year-on-year (yoy).

“We want every segment to contribute to our loan portfolio. However, so far, our biggest loan portfolio comes from the commercial segment, with a contribution of around 45 percent,” he said.

This year, the bank plans to focus on a loan restructuring program and keeping the gross non-performing loan (NPL) ratio below 3 percent.

By the end of 2018, its gross NPL ratio stood at 3.04 percent, up from 2.84 percent in 2017.

Meanwhile, Standard Chartered Bank Indonesia (SCBI), a branch of British lender Standard Chartered, targets credit growth of 12 to 13 percent, which is lower than its loan growth realization of 17 percent to Rp 32.2 trillion in 2018.

“Last year, our credit growth was 17 percent, but this year, it won’t be that high anymore. Probably it will grow around the [average] target [in the industry] set by the Financial Services Authority [OJK],” said SCBI chief financial officer Anwar Harsono in a separate occasion.

Corporate loans were SCBI’s main segment, accounting for almost 70 percent of the total, while the rest came from the retail segment, he said.

The bank would also continue to increase the loans it channels to small and medium enterprises (SMEs), he said.

In 2018, SCBI’s loans to SMEs contributed 23 percent to its total loan portfolio, higher than 13 percent seen in the preceding year.

SCBI CEO Rino Donosepoetro said global pressure might be milder this year, because the United States’ Federal Reserve had hinted at a lower number of interest rate hikes than last year.

At the same time, he said, Indonesia’s economic fundamentals were also expected to improve in 2019.

SCBI’s NPL ratio dropped to 2.2 percent at the end of 2018 from 3.9 percent in the previous year.

Both Panin Bank and SCBI posted surging net profit last year.

Panin Bank saw its net profit jump 59 percent to Rp 3.19 trillion in 2018, thanks to net interest income which reached Rp 8.97 trillion. Its other operational income grew by 56.69 percent last year.

Meanwhile, SCBI’s net profit skyrocketed by 371 percent to Rp 536 billion because of improvements in all financial aspects due to growth in corporate and institutional banking, known as the corporate segment.

Revenue from the corporate segment rose 36 percent and came primarily from financial markets and transaction banking that included trade finance, cash management, securities services and corporate loans.

“Our net profit achievement last year was the highest since 2014. This was one of the important milestones for us,” Rino said.