IPO IDR 1.49 Trillion, Bank Sumut Ready To Speed Credit Expansion To Digital Services

Illustration. (Photo: Doc. Antara)

JAKARTA - PT Bank Pembangunan Daerah Sumatera Utara Tbk (Bank Sumut) is ready to boost business performance by increasing credit expansion to developing information technology and digital services.

Bank Sumut, with the issuer code BSMT, plans to allocate 80 percent of the funds obtained from the initial public offering (IPO) for working capital to support the company's business expansion, including working capital loans, investment loans to consumer loans.

"About 20 percent of the rest will be used to expand the network and develop information technology to support the company's business activities, including digital services," said Acting President Director of Bank Sumut Hadi Sucipto, in his statement, Sunday, January 8.

In detail, 10 percent will be used as capital expenditure, including expenses for rental assets in the form of opening or extending office unit rentals, service units, renovating buildings, and information technology infrastructure. Meanwhile, another 10 percent will be used for operational spending in the form of developing ATM networks, digitalization services, improving security systems, and developing other information technology with management service schemes.

Along with the dynamics that occurred related to the change of the helm of Bank Sumut, the company ensured that the IPO series process would not be disrupted and banking operations would also continue to run normally.

"Even the Board of Directors and Commissioners of Bank Sumut will immediately expose investors. Everything is still on schedule," said Hadi Sucipto.

According to the prospectus, this regional bank belonging to the Provincial and Regency/City Government in North Sumatra has held an initial offering or bookbuilding of 2,934,798,300 shares (representing 23 percent of Bank Sumut's total shares after the IPO) from Thursday 5 January to Wednesday 18 January.

With a nominal value of IDR 250 per share, Bank Sumut has set an offering price in the price range of IDR 350 to IDR 510 per share so that the company has the potential to raise IDR 1.02 trillion in funds to a maximum of IDR 1.49 trillion.

The allocation of 80 percent of the IPO funds for working capital, the company has budgeted a maximum of IDR 1.19 trillion to boost business performance, including credit expansion. Meanwhile, the remaining IPO funds of IDR 299.34 billion will be used for network expansion and information technology development.

Through four securities companies, namely PT Aldiracita Sekuritas Indonesia, PT BRI Danareksa Sekuritas, PT RHB Sekuritas Indonesia, and PT UOB Kayhian Sekuritas as underwriters, Bank Sumut is scheduled to start the listing date of shares on the Indonesia Stock Exchange on February 7, 2023.

For the record, the amount of credit/financing that has been disbursed by Bank Sumut until the third quarter of 2022 (September 30, 2022) reached IDR 26.90 trillion, grew 2.01 percent or increased by IDR 534.40 billion compared to distribution in the second quarter of 2022 of IDR 26.36 trillion. This increase, according to the Acting President Director of Bank Sumut, was supported by productive credit expansion.

Meanwhile, Bank Sumut's credit/financing disbursement throughout 2021 was recorded at IDR 25.19 trillion, an increase of IDR 1.58 trillion or grew 6.68 percent compared to the 2020 period of IDR 23.61 trillion. At that time, based on the company's prospectus, the increase in the amount of credit was in line with the credit expansion carried out by Bank Sumut.

The credit/financing expansion in 2021 was supported by an increase in multipurpose and pre-pension loans of Rp1.12 trillion and people's business loans (KUR) of Rp144.86 billion. Meanwhile, in 2019, Bank Sumut's credit/financing disbursement amounted to Rp23.70 trillion. That way, over the last three years, Bank Sumut has consistently maintained an increase in lending and financing.

Meanwhile, based on a report from the Regional Financial Services Authority (OJK) of North Sumatra 5, lending by banks in North Sumatra was recorded at IDR 224.31 trillion (growing 1.76 percent year on year) until October 2022 with the composition of productive loans contributing 70.93 percent and consumptive loans 29.07 percent.

Along with increasing credit expansion, until September 2022, Bank Sumut managed to record a net profit of IDR 520.57 billion, growing 17.44 percent compared to the same period the previous year of IDR 443.29 billion.

On an annual basis, Bank Sumut's net profit was also quite solid, had a little correction in 2020 due to the COVID-19 pandemic. In 2019, Bank Sumut's net profit was recorded at IDR 544.75 billion, then decreased to IDR 514 billion in 2020 and rose again to IDR 613.60 billion in 2021.

In terms of profitability, Return on Equity (ROE) or the level of equity return of Bank Sumut in the third quarter of 2022 was 17.38 percent, higher than the same period the previous year 16.10 percent. Meanwhile, Return On Asset (ROA) or asset return rate of 2.17 percent, higher than the same period the previous year of 2.06 percent.