Housing bank refuses to cut hiked rates

Housing bank refuses to cut hiked rates

JAKARTA (JP): Bank Tabungan Negara, a state-owned bank
specializing in housing credits, ruled-out reversing its decision
to increase interest rates on its housing loans, in spite of
appeals from legislators.

The bank's credit director, Pandamsih, said at the opening of
a housing exhibition at the Jakarta Convention Center yesterday
that the interest rate increase, which was planned in May, was in
line with the upward trend of lending rates charged by other
banks.

A member of the House of Representatives' Commission V,
Koensholehoedin, suggested yesterday that the bank cancel the
decision to raise interest rates or, at least, postpone the hike
until after the commemoration of the Indonesian anniversary on
Aug. 17.

Beginning early this month, the bank has raised the interest
rate for the purchase of houses measuring more than 70 square
meters from 17.5 percent per annum to 19 percent.

The bank has also raised the interest rate on larger houses
from 18 percent to 20 percent a year.

However, the interest rate on credit for the purchase of
houses measuring a maximum of 21 square meters was maintained at
8.5 percent a year and that for the purchase of houses measuring
over 21 square meters but not more than 70 square meters at 11
percent.

As of last year, the bank booked total assets of Rp 6.86
trillion (US$3.04 billion) and outstanding loans of Rp 4.84
trillion, while its after-tax profit was recorded at Rp 72.69
billion. The bank's capital adequacy ratio was 33.8 percent, far
higher than the minimum standard of nine percent imposed on
domestic banks. (31)