BTN Explores Buyback Amid Shares Deemed 'Undervalued'

PT Bank Tabungan Negara (Persero) Tbk (stock code: BBTN) is considering a share buyback because BBTN’s share price is deemed undervalued. The results of this initiative would be allocated towards a share ownership programme for employees.

BTN President Director Nixon LP Napitupulu stated that this method is being considered given that the proportion of public shares in BBTN has currently reached the minimum regulatory limit.

“Currently, the BBTN share price is quite undervalued, so what we may consider is purchasing shares for employee needs, such as bonuses or stock options,” Nixon said in a statement received in Jakarta on Tuesday.

Nixon noted that the buyback plan has not yet been included in the Bank’s Business Plan (RBB). He added that the company will further study the possibility of including this plan in a revision of the RBB.

Previously, the Chief Operating Officer (COO) of Danantara Indonesia, Dony Oskaria, assessed that a buyback is a reasonable corporate action, particularly when the share price does not yet reflect the company’s fundamentals.

“A buyback is actually a normal process. If we see our shares are too low, it can certainly be an option. Rather than investing elsewhere, it is better to invest in our own company’s shares if the fundamentals are indeed strong,” said Dony.

According to Dony, several State-Owned Enterprises (SOEs) possess solid business fundamentals, including the banking, mining, and infrastructure sectors, as well as other business developments. Therefore, companies with strong fundamentals have the potential to continue creating value for shareholders.

BTN is currently strengthening its business fundamentals through both organic and inorganic growth strategies.