Two state-owned banks will carry out additional capital with pre-emptive rights

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Two state-owned banks, PT Bank Negara Indonesia Tbk (BBNI) and PT Bank Tabungan Negara Tbk (BBTN), will carry out additional capital with pre-emptive rights (HMETD) scheme or rights issue next year.
This rights issue plan was conveyed by the Minister of State-Owned Enterprises (BUMN) Erick Thohir during a working meeting with Commission VI DPR, last Thursday (2/12/2021).

The two rights issues of the two members of the Association of State-Owned Banks (Himbara) will be focused on strengthening capital and distributing credit.

BNI Corporate Secretary, Mucharom, in his explanation to the Indonesia Stock Exchange (IDX) said that regarding the planned rights issue, the company is currently still in the preparation stage and continues to build communication with relevant stakeholders.

“Currently, the company continues to focus on implementing a transformation program to improve performance and provide added value for all investors. This will also have an indirect impact on the company’s planned rights issue,” said Mucharom.

Meanwhile, a state-owned bank that focuses on housing finance, PT Bank Tabungan Negara (Persero) Tbk (BBTN), previously planned to propose a target amount of rights issue funds of Rp. 3.3 trillion, lower than the previous projection of Rp. 5 trillion.

“However, from various hearings, including with the Ministry of Finance, we proposed alternative two in which the rights issue would be reduced to Rp. 3.3 trillion, consisting of 60 percent of the government’s rights of Rp. 2 trillion and 40 percent of the public’s amounting to Rp. 1.3 trillion. Haru said in a hearing meeting (RDP) with Commission VI DPR RI, this Thursday (9/9/2021).

He said that if the second alternative was taken, the capacity for KPR distribution, which was originally 1.2 million units in 5 years, would become 1 million units in 5 years.

Haru said that the results of the rights issue would later strengthen BTN’s capital structure by maintaining a CAR ratio above the regulatory minimum under normal conditions of 15.25 percent.

“The rights issue funds are fully used for lending, especially housing loans. Currently, BTN has 90% of the total portfolio in housing and 70% mortgages, and this [rights issue funds] will be used for mortgage distribution for 5 years, namely 1, 2 million housing units in 2021-2025,” he explained.

source: cnbc