Fitch Ratings has today upgraded PT Bank Tabungan Pensiunan Nasional's (BTPN) National Long-term rating to 'AA-(idn) from A+(idn). The Outlook is Stable.
Also, the agency has affirmed the bank's Individual Rating at D and Support Rating at 4. Fitch has also upgraded the rating of BTPN's IDR750bn senior unsecured bonds issued in 2009 (Bond I/2009) to AA-(idn) from 'A+(idn)'.
BTPN's rating upgrades reflect the preservation of good asset quality (despite the rapid growth of micro loans since end-2008), the bank's improved funding structure, and lower but still good profitability. The bank's experienced management and the stronger operating environment should also help minimise operational and credit risks associated with the bank's rapid growth and diversification into micro loans.
Pre-provision operating profit declined to 3.7% of average assets in 2009, from 5.3% a year earlier, mainly due to the sharp increase in operating expenses from an investment in its IT system, the expansion of its micro banking outlets and the increase in personnel. Net interest margin (NIM) was relatively stable at 11.6% at end-2009 (2008: 11.4%).
Pre-provision operating profit declined to 3.7% of average assets in 2009, from 5.3% a year earlier, mainly due to the sharp increase in operating expenses from an investment in its IT system, the expansion of its micro banking outlets and the increase in personnel. Net interest margin (NIM) was relatively stable at 11.6% at end-2009 (2008: 11.4%).
BTPN's track record in its core segment of pension loans (85% of the bank's total loans) remained strong - NPLs in this segment were below 1.5% during 2007-2009 (2009: 0.5%). NPLs for micro loans were slightly higher, at 1.1%, and may rise slightly as the bank continues to expand its portfolio. Fitch's concerns are partly allayed by the bank's pre-emptive provisioning with loan loss reserves at 336% of NPLs at end-2009.
To reduce the asset-liability mismatch, the bank has expanded the sources of long term funding while continuing to grow its deposit base. During 2009, the bank issued IDR750bn bonds with three and five years maturities, it obtained a committed IDR-denominated funding facility from the International Finance Corporation (equivalent of USD70m), and signed a joint financing scheme with a number of local banks. The bank plans to issue additional senior bonds in H110, and is in discussion with a few international development agencies for other long-term funding facilities.
Established in 1958, BTPN is a medium-size public bank focusing on Indonesia's pension market. In March 2008, Texas Pacific Group acquired a 72% stake from a number of local investors. From late 2008, the bank has been an active micro financing player.
To reduce the asset-liability mismatch, the bank has expanded the sources of long term funding while continuing to grow its deposit base. During 2009, the bank issued IDR750bn bonds with three and five years maturities, it obtained a committed IDR-denominated funding facility from the International Finance Corporation (equivalent of USD70m), and signed a joint financing scheme with a number of local banks. The bank plans to issue additional senior bonds in H110, and is in discussion with a few international development agencies for other long-term funding facilities.
Established in 1958, BTPN is a medium-size public bank focusing on Indonesia's pension market. In March 2008, Texas Pacific Group acquired a 72% stake from a number of local investors. From late 2008, the bank has been an active micro financing player.
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