Bank Jatim stock sale to fund SME loans

Bank Jatim's lending in the first half has reached 94 percent of its full-year target touching Rp 18 trillion or US$1.9 billion, up 12 percent from last year.

The bank's president director Hadi Sukrianto attributed the strong demand from small and medium enterprises.

“Although we have reached a significant milestone in the first half of the year, we will not increase our year-end target of Rp 19 trillion,” Hadi said at the IDX on Thursday. “Our SME credits were about 83 percent of our total lending.”

The bank said it had 292,823 SME clients as of the end of 2011.

Hadi said that Bank Jatim’s had booked net profits of Rp 500 billion during the January to June period.

Bank Jatim said that it would remain focused on its established customer base in East Java, although it now had a larger opportunity to raise funds from the capital markets to support lending growth nationwide.

“We still have a captive market that can still be developed in East Java. However, we also have several syndicated loans for government projects, including power plants and toll roads,” Hadi said.

Bank Jatim officially floated its shares on the IDX on Thursday, after selling 2.98 billion shares, or about 20 percent of its enlarged capital, to the public last week.

The bank pocketed Rp 1.28 trillion from the stock sale, of which about 80 percent would be used to support credit expansion, 10 percent to improve its network and 10 percent to finance IT systems development.

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