BTN: The Need For Additional Capital Through PMN And Rights Issue To Support Housing Development For MBR

Illustration. (Photo: Doc. Antara)

JAKARTA - PT Bank Tabungan Negara (Persero) Tbk or BTN revealed that the proposal for additional capital through State Capital Increase (PMN) and rights issue was carried out, one of which was to support the development of housing for low-income people (MBR).

President Director of BTN Haru Koesmahargyo in a hearing with Commission VI DPR RI in Jakarta, Thursday 30 June, explained that the need for housing is still very high, especially for the MBR.

"There are 12.75 million housing backlogs and 61.7 percent of families living in unfit houses. In addition, there are 700-800 thousand new families growing per year who need houses," he said, quoted by Antara, Friday, July 1.

In addition, the ratio of Home Ownership Credit (KPR) to Indonesia's Gross Domestic Product (GDP) is still relatively low, which is only around 3 percent, lower than neighboring countries which are already above 5 percent.

"Even though the housing sector has a high contribution to 174 industrial sub-sectors. The housing sector is also resilient during the Covid-19 period, still growing positively," he added.

Haru said that the growth of the middle class and the trend of urbanization are also supporting factors to be able to encourage the housing sector. It is recorded that there are 60 million additional new middle class people projected in 2030 and 66 percent of the population is projected to live in urban areas in 2035.

On the other hand, the government also has great concern for developing the sector, where the 2020-2024 RPJMN in the housing sector, especially in the MBR segment targets the ratio of mortgages to GDP to increase to 4 percent in 2024; as many as 70 percent of families live in decent houses; and housing subsidies of 1.5 million units throughout 2020-2024.

From an internal perspective, among the 10 banks with the largest assets, BTN has a capital adequate ratio (CAR) of 19.1 percent, the lowest among other banks at above 20 percent.

With BTN's current capital structure, the accumulated interest cost of complementary capital during 2017-2021 is IDR 2.1 trillion as well as amortized capital of IDR 1.8 trillion per year.

"Considering the potential and condition of capital, BTN proposes additional capital through PMN and rights issue," he said.

Haru explained that from the proposed additional capital of Rp. 5 trillion, the government agreed to disburse Rp. 4.9 trillion to the housing bank. The government's participation reached 60 percent of new shares valued at Rp. 2.98 trillion, while the remaining Rp. 1.98 trillion was the portion of public participation.

"Our proposal is Rp. 5 trillion. The government's participation is in accordance with the government's share of 60 percent. From the discussions carried out, the government's portion is approximately Rp. 2.98 trillion. The total rights issue will be Rp. 4.9 trillion," he said.

Haru explained that the purpose of the additional capital was to strengthen the capital structure, so that financing for MBR could increase according to the RPJMN target, as well as for future business growth.