BTN to Strengthen Capital to Support Credit Expansion
Jakarta (ANTARA) - PT Bank Tabungan Negara (Persero) Tbk (BTN) has decided to strengthen its capital to support credit expansion.
This capital strengthening aligns with the shareholders’ decision to allocate BTN’s 2025 net profit of Rp3.5 trillion as retained earnings to support future credit expansion.
“For the use of profits, the Annual General Meeting of Shareholders (AGMS) has decided on a dividend payout ratio of 0 per cent, considering the need to support credit expansion exceeding the Business Plan and Budget (RKAP), so the profit will be used to strengthen capitalisation in 2026,” said BTN President Director Nixon LP Napitupulu during a press conference in Jakarta on Thursday.
This decision is driven by plans to acquire a credit portfolio that has been in process for a considerable time. The portfolio includes both productive and consumer credit with a transaction value exceeding 20 per cent of the company’s equity, thus requiring capital strengthening.
Nixon explained that the company has considered various funding options, including issuing debt securities, but deemed them less efficient.
“We had also planned to issue sub-debt or additional tier 1 capital (a type of subordinated debt issued by banks to strengthen additional core capital to meet regulatory capital requirements), but the timing is not feasible, and using it would incur interest costs,” he said.
Furthermore, he emphasised that the decision not to distribute dividends was made to maintain efficiency while strengthening expansion capacity.
In line with this, BTN targets credit and financing growth of 8-10 per cent in 2026, while continuing to focus on subsidised and non-subsidised housing segments, as well as strengthening the housing finance ecosystem.
Regarding credit expansion, the AGMS has approved granting authority to the Board of Commissioners of the Company, with prior approval in accordance with applicable provisions, to approve the plan to acquire the credit portfolio from a third party.
Nixon assessed that the credit portfolio acquisition has a better return profile and asset quality compared to the company’s existing portfolio, thus providing added value to the company.
“The yield is better than BTN’s current yield, that’s why we’re buying it. Then the NPL (Non-Performing Loan) is lower than BTN’s current NPL,” he revealed.
This transaction is projected to improve asset quality while enhancing BTN’s financial performance. With this portfolio purchase, BTN targets an NPL ratio below 3 per cent, better net interest income, and total credit exceeding the RKAP.
Currently, he added, the counterparty in the transaction cannot yet be disclosed as the process is ongoing, with a target signing of the agreement around mid-May.