State Mortgage Lender BTN Sees Profits Soar 63% in H1

Francezka Nangoy

Bank Tabungan Negara, the country’s state mortgage lender, said profit jumped 63 percent in the first half of the year, driven by rising loan demand.

Net income at BTN rose to Rp 621 billion ($65 million) in the January to June period, from Rp 381.2 billion in the same period last year. Net interest income, or the interest earned on loans after deducting interest paid for deposits, increased to Rp 2.27 trillion in the first half year, from Rp 1.69 trillion last year.

BTN is just the latest Indonesian lender to report favorable first-half earning results. Bank Mandiri, Bank Negara Indonesia, Bank Central Asia and others have already reported increases in net income in the first half of the year, with the lenders benefitting from rising loan demand and low interest rates in Southeast Asia’s largest economy.

Indonesia’s central bank, Bank Indonesia, has kept its benchmark rate at a record low of 5.75 percent for the past six months to spur economic growth.

Bank Central Asia, which is partly controlled by the Djarum Group, said net income rose 11 percent to Rp 5.3 trillion in the first half of the year, from Rp 4.8 trillion in the same period a year earlier.

Bank Mandiri’s net income rose 13 percent to Rp 7.1 trillion in the first half, from Rp 6.3 trillion in the same period last year. Its net interest income jumped 11 percent to Rp 12.7 trillion, from Rp 10.4 trillion, it reported on July 31.

Unlike these banks, BTN primarily focuses on mortgage lending.

The lender, majority controlled by the government, last month reduced the target for a planned rights issue to between Rp 1.6 trillion and Rp 1.8 trillion, from Rp 2 trillion previously.

BTN plans to sell 10 percent of its enlarged capital, with shares being offered at a range of Rp 1,250 to Rp 1,600 each. The secondary offering will take place in the second week of October, BTN’s president director said last month.

BTN has appointed investment bank Credit Suisse as international marketing agent for the rights issue. Bahana Securities, Danareksa Sekuritas and Mandiri Sekuritas will underwrite the offering.

The mortgage lender is 71.6 percent controlled by the government.

Shares of BTN gained 1.5 percent to Rp 1,370 on the Indonesia Stock Exchange on Wednesday.