Panin aims to boost retail loans: Senior executive<\/p>\n
The Jakarta Post
\nJakarta<\/p>\n
Bank Panin is among the few banks in the country that survived
\nthe banking crisis in the late 1990s without the government's
\ncostly bail-out scheme, called the bank recapitalization program.
\nRoosniati Salihin, the bank's deputy president, shared her
\nthoughts with The Jakarta Post's Dadan Wijaksana in a recent
\ninterview on the country's banking sector in general, as well as
\nPanin's business plans for the future. The following is an
\nexcerpt of the interview:<\/p>\n
Question (Q): The restructuring process of the banking sector has
\nbeen going on for almost six years now. In your opinion, what
\nprogress has been made over these years and what are the
\nchallenges the sector is currently facing?<\/p>\n
Answer (A): In line with the improvement in our macroeconomic
\nindicators, I'd say the banking sector has also shown signs of
\nrecovery. You can say that we now have much more breathing space
\nthan we did previously.<\/p>\n
We have now a capital adequacy ratio (CAR) of about 20 percent
\non average, much better than the minus 15 percent back during the
\ncrisis. The non-performing loan (NPL) ratios are also improving.
\nThose are the basic measures to determine a bank's financial
\nhealth. So overall, I'd say the current conditions are
\nencouraging.<\/p>\n
Q: The challenges?<\/p>\n
A: There are still plenty of them. Next year, we're going to have
\nto implement the Basel accord principles, and then there will
\nalso the so-called Indonesian banking architecture -- which will
\ndetermine the benchmark of a bank's performance -- to be issued
\nby the central bank.<\/p>\n
But, of course, the biggest challenge of all is our private
\nsector, which has been slow in its restructuring process. The
\ncondition of the private sector is improving, but slowly. This is
\nwhy at the moment banks are giving out more consumer loans than
\nloans to the private sector.<\/p>\n
Q: What about the demand? Is there really demand for loans from
\nthe private sector?<\/p>\n
A: It's beginning to improve, but not that significantly. While
\nmost old players are still restructuring their debts inherited
\nfrom the crisis, we do not see new players developing.<\/p>\n
But demand is there. The problem is, I think, most players are
\nstill considered \"unbankable\" because the risk remains too high.
\nThe challenge for the banking sector is how to make more loans
\nother than consumer loans, like to manufacturers and other lines
\nof business.<\/p>\n
Q: What is Panin's lending composition currently?<\/p>\n
A: Today, lending to consumers and small and medium-sized
\nenterprises (SMEs) represents about 30 percent of our total
\ncredits, and we have set a target of increasing that figure to 50
\npercent in the next three to five years.<\/p>\n
Most of the credits are for houses and cars.<\/p>\n
These consumer credits are considered attractive by banks
\nbecause of their high returns. At our bank for instance, the NPL
\nfor consumer credits stands at less than 1 percent.<\/p>\n
Q: Can you elaborate more on the Basel accord II?<\/p>\n
A: Actually, the central bank has been communicating this
\nperiodically to us since last year.<\/p>\n
From the banking sector, we fully support the policy as it
\nwould turn us into better bankers, as the principles were first
\nmeant to.<\/p>\n
In principle, the implementation of this policy aims to make
\nbanks more sensitive to market risks, to operational risks and
\ncredit risks.<\/p>\n
Q: Going back to the crisis, Panin managed to survive. Can you
\ntell us why?<\/p>\n
A: Well, the bank has been known as a conservative one, not just
\nnow but for a long time. Our management, even before the crisis
\nwhen most other banks were generously extending huge amounts of
\nloans, Panin set conservative growth targets. We never hurry in
\nanything that we do, not without sound calculations. This was
\nhelpful. Had we done things differently, I do not think things
\nwould have been the same.<\/p>\n
Also, we have this policy of trying to surpass everything that
\nthe regulator requires us to do in running our business. With the
\nCAR, for instance, we always try to double whatever the minimum
\nfigure that Bank Indonesia has set.<\/p>\n
And our top level management, or directors, during the crisis
\nwere mostly professional people who had been working together at
\nthe bank for between 10 and 15 years. So, I guess, the directors,
\nand the staff, of course, were very used to working as a team.<\/p>\n
We were included among the country's top 10 banks when the
\ncrisis struck. And we were the only bank in that group that
\nmanaged to survive without the recapitalization program, which is
\nquite an achievement.<\/p>\n
Aside from all that, we also had support from the ANZ Banking
\nGroup to help us get through all the problems. In 1999, ANZ
\nbought a some 10 percent stake in Panin. They were giving us
\ntechnical assistance, and also sent a director here in a transfer
\nof knowledge process. They have now raised their ownership in the
\nbank to about 29 percent.<\/p>\n
Panin's financial statements<\/p>\n
----------------------------------------------------------<\/p>\n
2003* 2002
\n------------------------------------------------------------
\nCAR (%) 34.6 32.9
\nNPLs Gross (%) 15.6 16.4
\nNPLs Net (%) 0.0 6.9
\nLDR (%) 71.6 41.4
\nProfit (Rp) 196 billion 16.8 billion
\n---------------------------------------------------
\n* As of June
\nCAR : Capital Adequacy Ratio
\nNPLs: Non-performing loans
\nLDR : Loan to deposit ratio<\/p>\n
Source: Panin Bank<\/p>", "url": "https:\/\/jawawa.id\/newsitem\/panin-aims-to-boost-retail-loans-senior-executive-1447893297", "image": "" }, "sponsor": "Okusi Associates", "sponsor_url": "https:\/\/okusiassociates.com" }