Transferring Non-performing Assets To Companies In Singapore Up To US$183.08 Million, Bank KB Bukopin Improves NPL Ratio

Photo: Doc. Antara/Bukopin

JAKARTA - PT Bank KB Bukopin Tbk has conducted sales transactions for non-performing loans (NPL) and loans at risk (LAR) as many as 180 debtors. The original principal balance (OPB) value was IDR 4.14 trillion and the selling value was IDR 2.65 trillion or US$183.08 million.

The transaction on June 21, 2022, which was valued at 31.31 percent of the book value of KB Bukopin's equity as of December 31, 2021, shows that the bank is starting to realize its goal of becoming a bank free from bad loans and becoming a clean bank.

Bank KB Bukopin Finance Director Seng Hyup Shin said, in order to improve the performance of KB Bukopin, the implementation of the transaction will reduce the level of Risk Weighted Assets (RWA) and at the same time reduce the level of NPL.

Gross NPL and Net NPL will decrease from 10.66 percent and 4.91 percent in the position of December 2021 to 5.94 percent and 3.60 percent in the position of December 2022, respectively.

"So it is hoped that KB Bukopin can improve its ability to disburse new, higher quality loans," he said in a statement quoted by Antara, Monday, July 18.

He explained that KB Bukopin would transfer ownership of the problematic asset portfolio to a Special Purpose Company (SPC) in Singapore.

The SPC then forwarded the bonds worth 180 million US dollars as payment. KB Kookmin Bank will issue an unconditional and irrevocable Stand-by Letter of Credit (SBLC) of USD 185 million and provide a Revolving Credit Facility (RCF) to SPC.

KB Bukopin is appointed as servicing agent or collection agent and is responsible for collection, enforcement, and so on, on behalf of SPC, which will then generate the main source of cash flow for SPC.

KB Bukopin has high confidence in IDMB United Pte Ltd (lUL) because the private bonds to be issued by IUL as a non-cash payment instrument will be guaranteed by SBLC issued by KB Kookmin Bank as the controlling shareholder in KB Bukopin.

“KB Bukopin will have a healthier and more viable financial structure with a better risk profile, so that in the future KB Bukopin can concentrate and allocate resources to develop competencies and accelerate business growth, as well as provide added value for all stakeholders," said Shin.

This year, he said, KB Bukopin will focus on creating a bank that is free from bad loans and will become a clean bank in 2023. KB Bukopin plans to strengthen its special asset management function so that in the future it is hoped that it will be able to handle non-performing loans quickly.