RETAIL BANKING | Cesar Tordesillas, Indonesia

Panin Bank hopes to boost capital by $272.9M

Panin Bank hopes to raise as much as US$272.9 million from the financial markets to strengthen its capitalization.

It said that it will target from Rp 1 trillion or US$110 million to Rp 2.5 trillion or US$272.9 million, reprots Jakarta Post.

“We will issue subordinated debt or bonds with a tenure of five years and above, but we’re still waiting for the rightmoment, which is determined by fuel prices and bond demand,” said the lender’s financial institution and international director Hendrawan Danusaputra.

In November 2010, the lender raised Rp 3 trillion by offering Rp 2.5 trillion bonds with five years tenure and Rp 500 billion bonds with seven years tenure. Most of it, 95 percent, was used for housing, auto and long-term investment credit, while theremaining 5 percent was invested in securities.

Currently, Panin has Rp 124.75 trillion in total assets, 450 branches in 28 provinces and 766 ATM machines. “This year, we’re preparing Rp 100 billion to open around 30 branches, half of which will be located in Java,” explained Hendrawan, adding thatlast year the bank opened 24 new branches.

With the new branches, Panin expects to increase total customers’ deposits by 15 percent to Rp 85.75 trillion. Hendrawan saidapproximately 55 percent of deposits in 2011 were in the form of savings. The bank expects this to increase to 60 percent this year, he said.

Approximately 67 percent of the bank’s credit portfolio is disbursed to consumer financing and small and medium enterprises.

Panin’s capital-adequacy ratio saw a slight increase from 16.65 percent to 17.45 percent in 2011, in line with the average for Indonesian banks of around 17 percent.

The company will preserve local currency credit as its main strength at a ratio of 90:10 compared to foreign exchange.

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