INDICATION BOND OFFERED STRUCTURE
Bond Name : Shelf Registered Bond II OCBC NISP Tranche I Year 2016
Bond Offered : IDR 2,000,000,000,000 (two trillion rupiah) in principal amount
Rating : idAAA (Triple A), stable outlook by PT Pemeringkat Efek Indonesia (“Pefindo”)
Maturity : Series A (370 days), Series B (2 years), Series C (3 years)
Coupon indication : Series A 7.50% – 8.00% per year, Series B 8.00% – 8.50% per year, Series C 8.25% – 8.75% per year
Coupon Payment : Quarterly
Collateral : –
Use of Proceeds : Working capital for financing
Listing : PT Bursa Efek Indonesia (“IDX”)
BookBuilding Period : 30 March – 14 April 2016
Offering Date : 29 April – 3 May 2016
Payment Date : 9 May 2016
Disbursement Date : 10 May 2016
Listing Date : 11 May 2016
Since 2005, OCBC Overseas Investment Pte. Ltd. As a subsidiary of Oversea-Chinese Banking Corporation Limited (OCBC Bank) has become the controlling shareholders, with ownership as at end of 2015 of 85.1%. Moreover, OCBC Bank as the ultimate shareholder constantly provides strong support to Bank OCBC NISP.
OCBC Bank is the longest established Singapore bank, formed in 1932 through the amalgamation of three local banks, the oldest of which was founded in 1912. It is the second largest financial services group in Singapore by assets, with total assets of SGD401billion as of December 31, 2014. OCBC is listed on the SGX-ST, and is one of the largest listed companies in Singapore by market capitalization. Its market capitalization was approximately SGD42billion as of December 31, 2014, based on the closing price of its ordinary shares.
OCBC Bank is one of the world’s most highly-rated banks, with an Aa1 rating from Moody’s. Recognised for its financial strength and stability, OCBC Bank is consistently ranked among the world’s strongest and safest banks by leading market research firms and publications.
The Company’s strategy is focused on its business development, increasing market share, and profitability. Furthermore, the Company is fairly confident in achiving its target through implementation of the following strategies:
Focusing on increase revenue
Increasing on current accounts and saving accounts growth
Improving on cost to income ratio
Increasing on branch office networks productivity
Increasing on risk management improvement synergy
Improving on operational excellence in order to become a “bank of choice” for customers
Strengthening the OCBC NISP Bank corporate culture
Focusing on three lines of defense in risk management
PT Bank OCBC NISP, Tbk operates in the commercial banks sector. Its lines of business are commercial bank, foreign exchange bank and sharia bank. As well as, the Bank’s product includes funding product (savings and deposits), bancassurance, investment product (money market mutual fund, fixed income funds, balanced funds and equity mutual funds). In addition to, OCBC NISP Premier, credit card, sharia banking, consumer loan, micro loan, commercial product (such as overdraft loan, demand loan, fixed loan, term loan and investment loan). Last, financing program, cash management project, trade finance, treasury products and electronic banking services.
As of December, 2015, the Bank had 45 branch offices, 249 sub-branch offices, 22 cash offices, 10 sub-branch sharia office, 12 payment point, and 759 automated teller machines (ATMs) throughout Indonesia.
Here are some of the business risks faced by the Company in operation:
1. Risk Related to Business Activities
a. Credit Risk
b. Liquidity Risk
c. Operational Risk
d. Market Risk
e. Legal Risk
f. Reputation Risk
g. Strategic Risk
h. Compliance Risk
2. Investment Risk For Bondholders
a. Liquidity Risk. The illiquid risk of bonds offered in the Public Offering is caused purpose of buying bonds as a long-term investment.
b. Default Risk. A risk resulting from the failure of the Company to make payments of interest and principal payable at a maturity time, or the failure of the Company to satisfy the other provisions stipulated in the contract bond is the impact of the deterioration of the performance and development of the Company’s business which resulted in the Company experiencing financial difficulties.
PT Bank OCBC NISP Tbk (NISP) recorded a net profit of IDR1.50trillion in 2015, growing by 12.6% YoY. The net profit growth was supported by the net interest income which has exceeded the operating expenses in the same period. Net interest income grew by 18% in 2015 while the interest expenses inched up by 15.4%. Net profit growth was also supported by maintain provisioning costs in 2015.
The company was able to post a credit growth up to 25.6% in 2015, relatively higher than the third-party funds growth. Higher loan growth has led the loan to deposit ratio (LDR) to rise by more than 440 bps to 98.0%. However, this level is still below Bank Indonesia limit threshold at 100%, giving room for the company to expand further.
The net income growth was also driving higher assets productivity as seen by maintain ROA and ROE to 1.70% and 9.60% respectively in 2015. While its capital adequacy ratio (CAR) stood at 17.3%. The company’s total assets and equity grew along with the loan expansion in 2015. Total assets grew by 16.8% to record IDR120.48trillion while equity grew by 9.8% to IDR16.41trillion. The company’s total loans expanded by 25.6% to IDR84.04trillion.
In the funding side, the third-party funds also continue to increase, growing by 19.9% to post IDR87.27trillion in 2015. The third-party funds growth in 2015 was supported by current account and savings which grew by 60.5% and 21.3% respectively.
In 2015, the bank recorded NIM at 4.1%, same level from last year’s. The moderate NIM indicates the bank’s ability to maintain its interest rate compared to last year. For the record, the company’s CASA ratio posted at 41.4% in 2015.
Bank OCBC NISP managed to maintain its healthy assets quality by further diversifying its credit disbursement in 2015. The company’s gross NPL was maintain at 1.3% of total gross loan worth IDR85.87trillion in 2015 versus 1.9% in 2010. OCBC NISP has disburse credit selectively to maintain its liquidity as well as good assets quality in 2015 due to slowing economic growth, and tight liquidity.