BTN Targets Syariah Spin Off and Merger with BSI

Dream - Bank Tabungan Negara or BTN plans to spin off its Syariah Business Unit (UUS) by acquiring one of the banks. However, the bank in question is still undisclosed.

BTN President Director Nixon Napitupulu said the spin-off strategy will be followed by the merger of BTN with PT Bank Syariah Indonesia Tbk (BSI).

"Indeed, the scheme is spin off first, then it will be cooperated with BSI," said Nixon quoted from Liputan6.com, Wednesday, August 9, 2023.

Nixon explained that this scheme was chosen because the transfer of assets from the state-owned bank is not possible at the moment. Bank BTN then negotiated with the Ministry of SOEs to carry out the spin-off.

"There is a considerable risk in the asset transfer pattern. So we agreed with the SOEs, the pattern is spin off first, then the equity will be cooperated with BSI," explained Nixon.

Meanwhile, Nixon is not yet willing to disclose the name of the bank to be acquired. Bank BTN is currently negotiating with one of the banks in question for the buying and selling process.

"We are in the process, we hope to have contact and agreement for buying and selling with one of the banks that we are currently approaching before the end of the year," said Nixon.

"We are currently negotiating the price with them. We are not pursuing a new PT, so we are acquiring one of the banks, and it will become Syariah. Then, when it is done, BSI will enter as a shareholder," he said.

PT Bank Syariah Indonesia Tbk (BRIS) itself is still studying and has not made any decisions regarding the corporate action plan.

"Regarding the news in the media about the corporate action to be taken against BTN's UUS involving BSI, we hereby convey that until now we have not made any decisions regarding this matter," said Gunawan A. Hartoyo, Corporate Secretary of PT Bank Syariah Indonesia Tbk.

This spin-off step was taken after the Financial Services Authority (OJK) launched OJK Regulation (POJK) 12/2023 regarding the spin-off of Syariah Business Units.

The regulation requires UUS with assets worth 50 percent of conventional commercial banks (BUK) or having minimum assets of Rp 50 trillion to submit permit applications or approvals no later than 2 years after the issuance of POJK to become separate entities.

The assets of Bank BTN Syariah have been observed to experience growth. In the first semester of 2023, the banking assets jumped 14.69 percent to Rp 46.27 trillion. In the same period the previous year, the value of BTN Syariah's assets was recorded at Rp 40.35 trillion.

Business Financing and DPK Grow Double Digit, BTN Syariah Profits Rp 281 Billion in Semester I-2023

Dream - BTN Syariah, the Syariah Business Unit of PT Bank BTN Tbk, reported a net profit growth of around 50 percent in the first semester of 2023 to Rp 281.21 billion. In the same period last year, BTN Syariah's profit reached Rp 190.90 billion.

This positive achievement of BTN Syariah is supported by stable business growth, including a 16 percent increase in syariah financing to Rp 33.90 trillion at the end of June 2023.

In addition to financing business, BTN Syariah also recorded double-digit growth in third-party funds (DPK) receipts. The cheap money business collected by BTN Syariah throughout the first semester of 2023 reached Rp 34.93 trillion, or grew by 14.56 percent compared to the same period last year of Rp 30.49 trillion.

With these achievements, the assets of BTN Syariah also managed to grow by 14.69 percent to Rp 46.27 trillion compared to the same period last year of Rp 40.35 trillion.

Achievements of Bank BTN

As for conventional Bank BTN itself, credit and financing disbursements reached around Rp 308 trillion throughout the first semester of 2023. BTN's achievement grew by 7.52 percent compared to the same period last year of Rp 286.15 trillion.

"The financial performance in the first semester of this year is indeed more challenging. We are optimistic that until the end of 2023, we can still achieve positive financial performance according to the set target. We are also still in the process of building a more modern and current Bank BTN," said Bank BTN President Director Nixon LP Napitupulu, quoted from Liputan6.com, Friday, July 21, 2023.

Nixon revealed that housing credit disbursements still dominate the company's total credit in the first semester of 2023. The housing credit disbursed by Bank BTN until the end of June 2023 reached Rp 269.48 trillion.

Of that amount, Subsidized Home Ownership Credit (KPR Subsidi) in the first semester of 2023 still contributed the most with a value of Rp 152.17 trillion, growing by 10.86 percent compared to the same period last year of Rp 137.25 trillion.

Meanwhile, Non-Subsidized Home Ownership Credit (KPR Non Subsidi) grew by 6.49% to Rp 90.83 trillion in the first semester of 2023 compared to the same period last year of Rp 85.30 trillion.

"We are driving credit while paying close attention to prudential principles. Our Gross NPL ratio is still well maintained at 3.66%. By the end of this year, we hope to lower the NPL ratio below 3%," said Nixon.

In terms of third-party funds (DPK), with the tightening of liquidity in the banking industry, Bank BTN managed to increase DPK in the first semester of 2023 to Rp 313.26 trillion, up from the same period last year of Rp 307.31 trillion.

Of that amount, the acquisition of cheap funds or CASA reached Rp 170.22 trillion, an increase of around 24 percent compared to the end of June 2022 of Rp 137.45 trillion.

Throughout the first semester of 2023, Bank BTN's net profit grew to nearly Rp 1.5 trillion, up from the same period last year of Rp 1.471 trillion.

Meanwhile, the total assets of Bank BTN until the end of June 2023 increased to Rp 400.54 trillion, compared to the same period last year of Rp 381.74 trillion.