Bank Jatim Targets Raising Rp 2t From IPO Next Month

By webadmin on 07:35 pm Jun 21, 2012
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Francezka Nangoy

Bank Pembangunan Daerah Jawa Timur expects to raise as much as Rp 1.99 trillion ($211 million) from selling shares in an initial public offering early next month, becoming the second regional development lender to list on the stock market after Bank Jabar Banten two years ago.

The lender, known as Bank Jatim, plans to offer 2.983 billion shares, or 20 percent of its enlarged capital, early next month. It will offer the shares to investors on July 3-5 with a planned listing on the Indonesia Stock Exchange on July 11, the lender said in a brief prospectus published in Investor Daily on Tuesday.

The Surabaya-based lender will set the IPO price at Rp 430 to Rp 670 per share, according to a statement released by the lender on Tuesday. At that price range, it would raise between Rp 1.28 trillion and Rp 1.99 trillion.

Bank Jabar raised Rp 1.45 trillion by selling 20 percent of its stake in July 2010.

Proceeds from the Bank Jatim IPO will be used to boost its capital adequacy ratio — a measure to assess the lender’s health — to 21 percent, much higher than the 8 percent minimum requirement set by Bank Indonesia.

The bank will use 80 percent of the proceeds to boost its lending, according to the prospectus.

The lender has forecast its lending to grow 23 percent this year. Loan growth at Bank Jatim was between 23 percent to 24 percent annually. Bank Indonesia, the central bank, has forecast growth in lending by the country’s commercial banks at 24 percent this year.

Total outstanding loans at Bank Jatim were Rp 17.7 trillion at mid-June, up from Rp 16.1 trillion at the end of last year, Hadi Sukrianto, president director of the lender, said at a public presentation in Jakarta on Tuesday. Net income at Bank Jatim is forecast at Rp 466 billion at the end of June.

The bank’s focus is on providing loans to small- and medium-sized companies. The SMEs account for 80 percent of Bank Jatim’s lending portfolio, with 20 percent in corporate loans, Hadi said. He added that demand from investors remained strong.

Andi Sidarta, a director at Bahana Securities, one of the IPO’s underwriters, agreed that demand by local investors was strong amid the global financial uncertainty. Bank Jatim also named Mandiri Sekuritas, a unit of Bank Mandiri, as a financial adviser for the offering.

Bank Jatim’s IPO comes at a time when the local stock market is under selling pressure triggered by uncertainty in the global economy. The benchmark Jakarta Compos ite Index — which closed at record on May 3 — rose 0.5 percent on Tuesday, taking its gain so far this year to 1.5 percent. The main stock gauge rose 3.2 percent last year.

Hadi said that the regional lender expected to add 25 new branches and 120 automated teller machines through the end of this year.