The Jakarta Post
State-owned Bank Tabungan Negara (BTN) announced on Thursday a plan to distribute Rp 20.9 billion (US$1.43 million) in dividends to its shareholders despite profits plunging last year.
The figure is equal to 10 percent of the bank’s profit of around Rp 209 billion in 2019, lower than last year’s dividends payout ratio of 20 percent. The government, which holds the majority stake in BTN, would receive a total of Rp 12.55 billion in dividends.
Meanwhile, 90 percent of last year’s profit will be used to strengthen the bank’s capital, BTN president director Pahala Nugraha Mansury said in a press conference on Thursday.
“Our work foundation in 2020 is to determine the direction of our company’s policy, which is to focus on improving business quality,” he said.
This year, the publicly listed bank has aimed for a net profit growth of more than 90 percent year-on-year (yoy) to between Rp 2.5 trillion and Rp 3 trillion. It eyes a 6 to 8 percent growth in assets and an 8 to 10 percent expansion in loan disbursement, which will be bolstered by mortgage loans.
Last year, BTN’s profits plummeted by 92.5 percent to around 209.26 billion from Rp 2.8 trillion in 2018 because nonperforming loans and costs of funds rose as weak economic activities took a toll on local banks.
The bank recorded a jump of bad loans in 2019 as its nonperforming loans ratio skyrocketed to 4.78 percent from 2.78 percent in 2018, nearing the 5 percent level considered healthy. Its loan loss provisions jumped 85.4 percent to Rp 6.16 trillion.
Meanwhile, BTN’s costs of funds went up to 6.1 percent last year from 5.77 percent in December 2018. Its lending still grew 7.36 percent to Rp 255.82 trillion in 2019, higher than the broader banking industry’s 6.08 percent growth, the lowest since 2009.
BTN’s stocks, traded on the Indonesia Stock Exchange under the code BBTN, closed at Rp 1,335 apiece on Friday, up 2.3 percent from the previous trading day. The stocks have slumped 40.67 percent in the past year, underperforming the broader benchmark Jakarta Composite Index’s 24.51 percent drop.