BTN to be more selective in corporate lending as cost of funds rises

PT Bank Tabungan Negara (Persero) Tbk (BTN) will be more selective in disbursing loans to large corporations offering low yields, as the bank’s cost of funds rises amid tight liquidity. However, the company confirmed that lending for government programmes, such as Housing Microcredit (KUR Perumahan) or the Housing Programme Loan (KKP) and the Housing Finance Liquidity Facility (FLPP), remains a priority. “But for large corporations with low yields, we have been very selective, even tending to delete them from our pipeline first,” said BTN President Director Nixon LP Napitupulu during a press conference in Jakarta on Thursday. According to him, the measure was taken because the increase in the cost of funds means the company can no longer offer low-interest loans to debtors. “Today we cannot sell loans with interest rates that are too cheap because the cost of funds has risen. Therefore, we are choosing which segments to enter. Government programmes are still running. But for corporations where the interest is too cheap, we are starting to reduce them,” Nixon said. The increase in the benchmark interest rate (BI-Rate), followed by a rise in the yield on Bank Indonesia Rupiah Securities (SRBI), has absorbed banking liquidity, causing the cost of raising funds to increase. Nixon said the company continues to monitor developments in the BI-Rate and SRBI interest rates, which still show an upward trend. As long as there is no signal of monetary policy easing, BTN will remain cautious in lending. He added that the company also holds an asset liability committee (ALCO) meeting every week to monitor liquidity developments and macroeconomic conditions. “The game changer today is liquidity. We cannot force credit to grow when there is no money. Liquidity is like blood in the body. If the blood decreases, do not force it to run fast,” Nixon said. On the other hand, BTN is maintaining its credit growth target for this year in the range of 8-10% and is not revising its Bank Business Plan (RBB). The company is only making adjustments to internal key performance indicators (KPI). “We are not revising the RBB, it has been decided together with Danantara. So we are only changing internal KPIs. The numbers that come out, nothing has changed,” Nixon said. Meanwhile, BTN is also maintaining its cost of funds target in the range of 3.1-3.3% by year-end. According to him, pressure on the cost of funds increased when the withdrawal of the Excess Budget Balance (SAL) occurred simultaneously with liquidity absorption through SRBI and the issuance of government instruments, triggering competition for deposit rates at the end of June. However, the situation has eased after the government returned some SAL funds to state-owned banks. Nixon mentioned that the additional funds received by BTN reached nearly IDR 13 trillion. Following the government’s replacement of SAL, he noted that liquidity pressures and interest rate competition began to subside. The company hopes that the subsequent return of SAL funds to the government will be carried out with attention to appropriate timing. “Except for September, in September we must return a certain amount. Perhaps after that, because the withdrawal will be gradual, we only ask that the timing be considered carefully (when the SAL is to be withdrawn by the government),” Nixon said. As of the end of June 2026, BTN recorded consolidated loan and financing growth of 11.2% year-on-year (yoy) to IDR 418.11 trillion. Subsidised mortgages (KPR Subsidi) remained the main driver of housing loans, rising 8.1% yoy to IDR 196.96 trillion. In addition, the Housing Programme Loans (KPP) disbursed by BTN were recorded at IDR 4.1 trillion as of June 2026, since their launch at the end of October 2025. On the funding side, third-party funds (DPK) reached IDR 433.00 trillion, growing 6.6% yoy. The company continues to strengthen its low-cost funding structure as a foundation for long-term growth. As of the end of June 2026, BTN’s cost of funds stood at 3.01%. The company also succeeded in reducing its loan at risk (LAR) to 18.6% and lowering its cost of credit (CoC) to 0.7% in the first half of 2026. Meanwhile, the capital adequacy ratio (CAR) increased to 20% in the same period.