BPS committed to middle-class housing
JAKARTA (JP): The publicly-listed Bank Papan Sejahtera (BPS) will continue to maintain its core business of financing housing developments for the middle class, the bank's new president, Al Njoo, said yesterday.
"There's no significant change. We are still committed to providing housing credits. But we'll expand our sources of cheap funds," Al Njoo said after being elected the bank's president at a shareholder's meeting here.
Al Njoo said that major efforts are being undertaken by both the government and the private sector, including Bank Papan, to develop a secondary mortgage market where mortgages are converted into long-term securities.
"Mortgage securities are rated, marketable, and carry special protection against losses. As a result, such securities can be sold to investors at interest rates much lower than that on the market," he said, adding that it will benefit consumers through the lowering of the cost of borrowing.
Asked when it will be realized, he said "as soon as possible."
He cited Malaysia as an example. "That country, with only a tenth of Indonesia' population, already has a secondary mortgage institution, Cagamas," he said.
The institution, he said, has successfully tapped funds from the long-term fixed rate bond market.
The long term funding base has supported the development of a fixed-rate mortgage, a facility not yet available in Indonesia, he added.
According to Al Njoo, Bank Papan will also intensify its efforts of tapping funds from the public through deposits and credit cards.
"We aim to double the funds generated from the public this year," he noted.
Al Njoo pointed out that Bank Papan, which last year posted a 44 percent drop in net profits to Rp 9.4 billion (US$4.02 million) due to higher provisions for bad loans and narrowing interest margins, will slow the growth rate of its credits this year to 30 percent from 51 percent last year.
"This is due to the tight money policy imposed by Bank Indonesia, the central bank," he said. But he expressed the hope that this year's profits will be higher.
At yesterday's meeting, the shareholders approved the new line-up of Bank Papan's board of directors, comprising president Al Njoo, vice president Enny Angreni Hardjanto and directors Erica S. Fachry, M. Kemal Karyadana, Mohammad Afdal R.P. Pamilih and Roekman Prawirasasra.
There is no change in its board of commissioners, which is chaired by Haryono.
Bank Papan, which is listed on the Jakarta Stock Exchange, is 19.8 percent owned by PT Tunasmas Paduarta -- controlled by businessman Hashim Djojohadikusumo -- 13.1 percent by Bank Indonesia, 6.8 percent by Asuransi Jiwa Bersama Bumiputra 1912, 6.5 percent by PT REI Sewindu, 5.7 percent by PT Asuransi Jiwasraya and 34 percent by foreign and local shareholders through the capital market.
Hashim bought Bank Papan shares last year from Jopie Wijaya, chairman of the Steady Safe Group, who had previously bought the majority of Bank Indonesia's shares through the Jakarta Stock Exchange. (13)